According to @QCompounding, investors should target companies whose Owner's Earnings grow at least 12% annually, noting that higher growth generally drives better returns (source: @QCompounding). Owner's Earnings is the distributable cash after necessary reinvestment, a concept outlined by Warren Buffett and used to assess true economic profitability (source: Berkshire Hathaway 1986 Shareholder Letter). Traders can operationalize this guidance by calculating a 3–5 year Owner's Earnings CAGR and filtering for names at or above 12% to identify capital-efficient compounders for potential outperformance (source: @QCompounding).

According to @QCompounding, focusing on Owner's Earnings removes the distraction of short-term market swings and highlights true long-term profitability for clearer trade decisions, source: @QCompounding tweet dated 2025-08-26. Owner's Earnings is described by Warren Buffett as reported earnings plus depreciation and other non-cash charges minus the average annual maintenance capital expenditures required to maintain competitive position and unit volume, representing distributable cash, source: Berkshire Hathaway 1986 Shareholder Letter. Using Owner's Earnings rather than volatile GAAP net income can stabilize valuation multiples and improve entry and exit timing in cyclical sectors by anchoring on cash-based profitability, source: @QCompounding tweet dated 2025-08-26 and Berkshire Hathaway 1986 Shareholder Letter. Practically, traders can reconcile cash flow statements and capex disclosures in Form 10-K and Form 10-Q to estimate Owner's Earnings and test the sustainability of dividends and buybacks during drawdowns, source: SEC Form 10-K and Form 10-Q reporting requirements and Berkshire Hathaway 1986 Shareholder Letter.

According to Compounding Quality on Twitter, focusing on Return on Equity (ROE) is crucial for traders and investors, as time deteriorates poor businesses while strengthening great ones. The thread cites Warren Buffett and Charlie Munger’s experiences, emphasizing that high-ROE companies tend to outperform in the long run, which is a core principle for stock and crypto traders seeking sustainable growth and reduced downside risk (Source: Compounding Quality Twitter, June 14, 2025). Monitoring ROE can help traders identify companies and projects with strong fundamentals, which is increasingly relevant as crypto projects and tokenized stocks face similar long-term value challenges.

According to The Kobeissi Letter, Warren Buffett expressed a cautious outlook on equities, stating that compelling investment opportunities are rare, indicating difficulty in finding bargains in a strong market.

According to The Kobeissi Letter, Warren Buffett has expressed a cautious outlook on equities, noting that often nothing looks compelling and only infrequently do opportunities arise. This suggests that Buffett is currently finding it difficult to locate bargains in a historically strong market.

According to The Kobeissi Letter, Warren Buffett's cash reserves have grown larger than the market capitalization of Coca-Cola and T-Mobile. This notable accumulation of cash, which exceeds the market cap of all but 30 public companies globally, may indicate a cautious approach towards current market valuations. Traders might interpret this as a potential warning sign about market conditions, as Buffett tends to accumulate cash when he perceives overvaluation risks. However, investors should consider multiple factors before making trading decisions. The Kobeissi Letter emphasizes the significance of this cash reserve as a critical indicator for traders.