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After reading IETC I had the same experience. Applying it to a few of my favourite hidden gems didn't give very good results. The way I explained this to myself is that it's most likely due to the fact that HG tries to identify companies early in their development so the power staircase pattern hasn't been established yet. But hopefully it will in the future.

One question is, once a company shows a power staircase pattern in its earnings, is it still a good time to invest in them?

And another: what are the statistics of companies that did show early signs of developing a power staircase but that turned out to be bad investments anyway?

I think the importance of the book is that the concept makes common sense. So applying the principles when looking to invest in a company seems like a good idea as part of your valuation toolbox. But to use it as a general guidance for complete portfolio construction I'd need to see a bit more substantiation that doing so leads to superior results. A lot more than just showing how good the picture looks for a few obviously successful companies. I have been meaning to look at this in more detail but simply have been lacking the time to do so.

Mark
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