// STUDY RESULT · 1998-01 TO 2026-09

Inspired by Buffett: Moats and Owner Earnings

DATA VALIDATED

Buy businesses with durable competitive advantages at sensible prices, valued on owner earnings (true distributable cash), and hold.

How this run differs from the source: Buffett published no screen: free cash flow stands in for owner earnings, with no moat, debt or management test.

	THE STRATEGY	$SPXTR BUY & HOLD
CAGR	18.9%	9.3%
Sharpe ratio	0.90	0.66
Max drawdown	-49.7%	-50.9%

// GROWTH OF $1, LOG SCALE

AMBER: THE STRATEGY · GREY: $SPXTR BUY & HOLD

Out-of-sample (from the split): CAGR 16.4% against 14.0% for the benchmark; Sharpe 1.00 in-sample, 0.78 out-of-sample.

After 25 bps of trading costs: 17.6% a year. WITHIN RANDOM

// DECADE BY DECADE

ERA	STRATEGY	BENCHMARK
1990s	14.8%	20.9%
2000s	21.4%	-0.8%
2010s	14.0%	14.0%
2020s	24.0%	15.2%

// YEAR BY YEAR, LOSING YEARS IN RED

1998*25.2%27.2%

199910.6%21.0%

200029.4%-9.1%

200133.9%-11.9%

200211.9%-22.1%

200364.9%28.7%

200428.3%10.9%

200518.3%4.9%

200619.2%15.8%

20071.6%5.5%

2008-30.1%-37.0%

200962.5%26.5%

201042.1%15.1%

2011-8.2%2.1%

201223.3%16.0%

201354.8%32.4%

20148.3%13.7%

2015-11.7%1.4%

201620.5%12.0%

201732.0%21.8%

2018-16.1%-4.4%

201926.2%31.5%

2020-4.5%18.4%

202157.2%28.7%

2022-7.1%-18.1%

202332.2%26.3%

202424.9%25.0%

202535.3%17.9%

2026*25.6%11.8%

Losing years: 2008 (-30.1%), 2011 (-8.2%), 2015 (-11.7%), 2018 (-16.1%), 2020 (-4.5%), 2022 (-7.1%). Each cell: the strategy, then the benchmark below it. * a part year.

// THE IDEA, AS PUBLISHED

Berkshire Hathaway shareholder letters (1977-); esp. 1986 appendix · 1986

Owner earnings = net income + D&A and other non-cash charges - maintenance capex (an estimate) and any extra working capital
Understandable business with durable advantages, good ROE with little or no debt, able management of integrity
Buy well below conservative intrinsic value; concentrate; rarely sell

RUN IT YOURSELF ▸ IN THE LIBRARY

A real computation on the QuantGPT warehouse, walk-forward. A study across the whole market includes only part of the companies that later delisted from 1998 (survivors only before); a study on your own list of tickers is not affected. Gross returns, no costs except where stated. Past performance is not a promise. Findings, not advice. COMPUTED 2026-11-09 08:46 ON THE QUANTGPT WAREHOUSE. COMPANIES THAT LATER DELISTED ARE ONLY PARTLY IN THIS UNIVERSE (A FIX IS IN PROGRESS), SO THE RESULT LEANS TOWARD SURVIVORS. FUNDAMENTALS BY FILING DATE. NOT INVESTMENT ADVICE. PRIVACY