Measuring Quality

Made famous by Benjamin Graham back in the 1930s (who postulated that one’s loss would be greater buying a low quality business at a price that seems good value, than a high quality company at an excessively high price) and expounded upon by management consultants like Tom Peters (“In Search of Excellence”) and Michael Porter (“Competitive Advantage”), many have attempted to establish a defined set of criteria to measure quality. While the human bias is to gravitate towards absolute measurement, measuring quality remains a very difficult endeavour. Since there are no “pure” standards set to define the term, one analyst’s view of great quality could differ greatly from another.

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