Lugarno Bluechips

Warren Buffett and Charlie Munger have said time and again, investing is simple but it isn’t easy.

Lugarno Bluechips is a reliable stock portfolio, with a structure that attempts to solve for the more difficult parts of investing.

Lugarno Bluechips has three primary characteristics:

The world’s great companies
Bought at a reasonable price
Held indefinitely

Great businesses generate reliable profits and have quality reinvestment options to grow those profits over time. Businesses who don’t have quality reinvestment options can also be great so long as they make the rational decision to return spare capital to shareholders.

What makes a moat?

We identify a company's moat via one or more of these categories. 7 of the 8 are credited to Hamilton Helmer's 7 Powers.

Network Effects

As the user base grows,
the product’s value increases.

Counter positioning

A business adopts a new, superior business model that incumbents cannot mimic due to the anticipated cannibalization of their existing business.

Switching costs

One-time expenses or inconveniences a customer would have to incur to move away or switch to a competitor.

Branding

Where extreme brand loyalty and legacy allow a company to enjoy enhanced returns.

Cornered Resource

Preferential access or ownership of a coveted resource that independently enhances value.

Process power

A business that's systems and skill enables lower costs, or a superior product, that can only be matched by extended commitment.

Management & culture

Sometimes a company's leadership and the culture they permeate will be so exceptional they are a competitive advantage. Its rare and most commonly identified in founder-led businesses.

Scale economies

A business that has grown to such a scale that its costs per unit decline as volume increases. Significant investments are required, but this widens the moat over time.