// strategy template
Quality Compounders
High-return businesses that reinvest at high rates for years.
// the lines that end the argument
One criterion is hard: fail it and the score is capped no matter how well everything else scores.
- ROIC ≥ 15.0%
What gets measured
| Criterion | Needs | Weight |
|---|---|---|
| ROIChardAfter-tax operating income over invested capital. | ≥ 15.0%partial credit to 12.0% | 17%Missing: the criterion is skipped and its weight is dropped. |
| Gross marginGross profit over revenue (TTM). | ≥ 40.0%partial credit to 35.0% | 13%Missing: the criterion is skipped and its weight is dropped. |
| Operating marginOperating income over revenue (TTM). | ≥ 20.0%partial credit to 16.0% | 13%Missing: the criterion is skipped and its weight is dropped. |
| Revenue CAGR 3yThree-year revenue compound annual growth. | ≥ 8.0%partial credit to 6.0% | 13%Missing: the criterion is skipped and its weight is dropped. |
| EPS CAGR 3yThree-year EPS compound annual growth. | ≥ 10.0%partial credit to 7.0% | 10%Missing: the criterion is skipped and its weight is dropped. |
| Net debt / EBITDATotal debt minus cash, over EBITDA (TTM). | ≤ 1.50partial credit to 2.00 | 10%Missing: the criterion is skipped and its weight is dropped. |
Weight is each criterion's share of the whole rule-set, rounded for display. Every figure here comes from the same file the product scores with - the page cannot say one thing while the terminal does another.
What needs judgment
Wide moat durability
15%Will returns on capital survive competition for a decade?
Reinvestment runway
10%Can retained earnings be deployed at similar returns?
These are the criteria a formula cannot settle. The AI judges them against the guidance above and shows its reasoning next to the verdict; the arithmetic stays with the deterministic rules.
Rules about the portfolio, not the stock
- No single position above 12% of the portfolio.
- No sector above 40% of the portfolio.
These are checked against the book as a whole. A holding can clear every criterion above and still put the portfolio in breach by being too large.
Before you take it as given
This rule-set is a starting point. The moment a portfolio applies it, every threshold, weight and hard line is yours to move - and most people should move them, because the thresholds that make sense for a concentrated book are not the ones that make sense for a wide one.
It has not been backtested and Monsa does not claim it works. What Monsa does is narrower and checkable: hold these rules, and every night it will tell you which of your holdings still clear them and which quietly stopped.
Applying a template takes a minute. The part that is hard to do alone is still being held to it in eight months.