This is related to Moody's ranking and S&; P's ranking is very similar. Quality is quality, and everyone knows it. If you have a high stable return, you can set the price, and you are the price maker. If you are a great company, only you can do it. If you can do this, you don't need to be in debt. So for us, high-quality companies are Coca-Cola, Microsoft and Merck.

Granson's definition of a high-quality company is also very similar to Buffett's. Buffett has said countless times that he would rather buy a good company at a normal price than a mediocre company at a good price. He said that a good company has the following characteristics:

1. Proven and predictable income and profit growth;

2. Sustainable pricing ability and gross profit margin (moat);

3. Be managed by competent people.

Coca-Cola has all the above characteristics, so it is Buffett's biggest position.

Mason Hawkins of Changye Fund has also discussed his definition of high quality in detail:

1. Unique and continuous competitive advantage enables it to have pricing power, profitable growth and stable or increased profit rate;

2. Free cash flow, rather than high ROC and ROE based on profit, makes profit easily manipulated by accounting methods;

3. A properly controlled balance sheet with a relatively low asset-liability ratio will not be excessively expanded in difficult times. The asset-liability ratio is only a standard to measure the capital structure. In our letter from Longleaf Partners Funds to shareholders, we consider the total debt/the sum of the parts value. We also review the debt structure, contract, debt maturity date, and operating cash flow/interest coverage to make sure that a company can easily cope with its debt.

4. Management means, capital allocation ability, appropriate alliance and motivation to serve shareholders of the company. In the past 3 years, most of the investments we have made well are those owners (and operators) who have the ability to gain vested interests. They make decisions to improve the quality of enterprises and increase the value per share.

John Hussan wrote in his annual report in 21:

despair extensive historical evidence against this proposition, Bernanke's rhetoric and his repeated education of the stock market proven a survey in stocks associated with what wall street typically calls the "risk trade." This includes cyclical and commodity-related industries, small-cap stocks, companies with uneven income growth and unstable profit margins. These are typical characteristics of low-quality companies.

Vandenberg once commented:

This can be found from the four emotions that investors experience when they own stocks:

1. Indifference Many people are not interested in declining and long-term sideways stocks, such as Microsoft, Automatic Data Processing and Wal-Mart, and there are many other stocks, especially large-cap stocks.

2. Once a stock that hates buying falls or is sideways for a long time, people will feel disgusted and just want to sell it, without even taking a look at the portfolio. In addition, many investment managers and brokers will surrender in this case, and they don't want these stocks to appear in the monthly portfolio report.

3. panic when there are some big problems in the economy, investors who don't seriously measure the value of the company will sell their stocks because of non-operating problems. Without analyzing and determining the real price potential of the company, many investors and even professionals succumb to their emotions and panic selling. This situation is far beyond your imagination.

when investors see their stocks keep falling, they will be angry. This often happens when the stock price is at or near the bottom. Due to the loss of money and psychological damage, investors tend to surrender. At this stage, investors usually sell stocks cheaply regardless of the price.