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Compete or Create: The Difference Between Incremental and Exponential Returns

What a day at the Montgomery Summit investor conference. Al kicked-off day two with a keynote unveiling a new investment strategy centered on the Category Contenders. We’ve shared research on this group before, which demonstrated historic return rates for the Contenders that went on to become Category Queens and Kings. 

Why is this? 

Because these companies have a clear perspective on solving a different problem. They have experienced growth, and are poised to make the leap from one of many, to the sole winner in a category they design. 

It all comes down to a difficult decision - compete in an existing category, or embrace being different and create a new one. To be in a position to make this decision is rare, and for those that choose to create, it opens the door to legendary returns. As Al put it in his keynote, these are the portfolio makers. 

As a strategy for investing, finding these contenders - companies with high rates of growth and a vision for solving a different problem - offers an enormous advantage. While, of course, not every contender will successfully make the quantum leap to King or Queen, those that do will win big. In our peer reviewed research, that equates to 76% of a category’s value going to one company.

By amassing Category Contenders in a portfolio, investors position themselves to reap the outsized returns that these market-makers are capable of generating. 

See the full announcement here, and stay tuned for more including the full talk from Al at the Montgomery Summit.

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