Buffett's 8-Pillar Framework
01
Capital Allocation
The CEO's most important job. Every dollar of retained profit must earn more than shareholders could elsewhere. Most managers are terrible at this.
02
Owner Earnings
Net income plus depreciation minus maintenance capex. Strip the accounting theater. Follow the real cash the business generates for its owners.
03
Economic Moats
Brand, switching costs, network effects, cost advantages, regulatory protection. The difference between a business that thrives and one that merely survives.
04
Margin of Safety
Pay considerably less than intrinsic value. You're not smart enough to predict the future precisely — but you are smart enough to buy dollar bills for fifty cents.
05
Circle of Competence
Only swing at pitches you understand. The key is knowing the boundaries of your circle — not just what's inside it. Most investors' biggest mistake is swinging at everything.
06
Long-Duration Compounding
Hold great businesses for decades. Unrealized gains compound without tax friction. Turnover kills compounding. The eighth wonder of the world works best undisturbed.
07
Float Economics
Some businesses get paid before they deliver value — insurance, deposits, subscriptions. That float is an interest-free loan. Float with low cost of capital is a force multiplier.
08
Management Quality
Integrity first, then intelligence, then energy. Without integrity, intelligence and energy are dangerous. Find managers who think like owners, not hired hands optimizing their comp.
How Dominion uses Buffett
1
Cash-Flow Business Screen for /ma Deals
Use Buffett's owner-earnings framework to evaluate every acquisition target. Strip GAAP reported earnings and compute actual FCF minus maintenance capex. This single adjustment eliminates businesses that look profitable on paper but require constant capital reinvestment to stay alive.
2
Moat Classification for Portfolio Companies
Map every Dominion portfolio company to one of the five moat types. Which moats are widening vs. narrowing over time? Where is competitive erosion already visible? Buffett's moat framework forces systematic assessment of durable competitive advantage before underwriting a 10-year hold.
3
Capital Allocation Reviews with Operating Partners
Run quarterly capital allocation reviews using Buffett's retained-earnings test: is each dollar of profit being reinvested at rates better than shareholders could achieve elsewhere? Where is capital sitting idle or being deployed at below-hurdle returns? The answer drives buy vs. hold vs. distribution decisions.
Also consult
RD
Ray Dalio
All-Weather Portfolio & Risk
NR
Naval Ravikant
Leverage & Specific Knowledge
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