The very first thing we do when we start to analyze a company is to ask ourselves how far the stock price would fall if we were wrong. It’s not some back-of-theenvelope We believe in the power of compounding and the simple math is that you can’t compound very well if you suffer too much on the downside. I don’t understand why people who can go on at length about why this or that company will grow and prosper often spend little time on what can go wrong and the impact it could have on the share price. It’s not as if defining the downside is more difficult it’s probably easier than estimating the upside.