Why There Are Actually Only 150 Investable Companies
Out of roughly 58,000 publicly quoted shares in the OECD, barely a few dozen—or at most one-to-two hundred if you cast the net worldwide—qualify as true “quality-growth” royalty.
If we start with 58,000 listed companies in the OECD and apply to two filter screens:
Sector & ESG triage. Half the market fails immediately (e.g., oil majors, tobacco) because their business models fail long-term sustainability tests.
Ten Golden Rules filter. From the survivors we applies ten qualitative hurdles (see next section). The result? “No more than five or six dozen companies”—roughly 0.1 % of the starting universe—make the cut at any point in time.
That’s the tiny club this article spotlights.
Inside the Ten Golden Rules
These rules operate as a Boolean gate: miss one, you’re out.
How the Universe Shrinks
Sector Exclusions
The initial triage drops entire industries:
Commodities & Extraction – fail Rules 1, 7 (cyclical, capital-hungry).
Banks & Insurers – opaque leverage violates Rule 9.
Telecom Carriers – quasi-utilities with low ROIC.
Autos & Airlines – brutal margins, capital intensity.
That cull alone removes ~30 % of global market cap.
Rule-by-Rule Attrition
Among the 29,000 or so names left, Rule 8 (balance-sheet strength) is the biggest killer—especially after years of cheap debt. Rule 4 (moat) and Rule 9 (accounting clarity) wipe out fast-growing tech names with dazzling top lines but fuzzy cash flow.
Survivors: A Hall of Fame
Recurring alumni include:
Mastercard (Rule 7 poster child, 60 %+ EBIT margin)
ADP (decades-long payroll moat, net cash)
Dassault Systèmes (dominant in 3-D CAD; case study in the book)
Nike (brand moat + pricing power)
Despite different industries, every one ticks all ten boxes simultaneously.
Performance Proof
A concentrated portfolio of 20–25 “only-the-best” names has outperformed the MSCI World by ~1.9 % per year over 27 years, turning $10 k into more than 8× versus 4× for the index—even after three major bear markets. Equally important: volatility is lower, thanks to fortress balance sheets and predictable cash flows.
Common Critiques… and Rebuttals
Case Study Snapshot: Why PayPal Was Ejected
Rule 4 breach: Intensifying competition from Apple Pay and BNPL eroded its network advantage.
Rule 8 breach: Share buybacks funded by debt lifted leverage above net-cash comfort.
Outcome: Removed from several quality-growth portfolios in 2023 despite 20 % revenue CAGR—growth ≠ quality.
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