Stock picking advice from market-beating, $72 billion Harding Loevner - Business Insider

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Harding Loevner's global stock fund has trounced the market for over 30 years. Here's an inside look at the simple 4-part stock-picking criteria that helped the firm balloon to $72 billion.

Although discerning high-quality management is inherently subjective, Hallett was able to figure out a way to remove some of the ambiguity. To him, the way management routes capital to shareholders and allocates it for future prosperity is imperative.

"The other aspect of high-quality management for us is corporate governance, which is essentially how those high returns on capital end up with shareholders," he said. "Are they retained in the company, are they paid out in dividends, are they distributed via buybacks or are they used to further the interest of other stakeholders, most noticeably, of course, the executives of the company?"To Hallett, financial strength doesn't just mean low leverage.

 

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