Buffett's framework is brutally simple: Great businesses compound, good ones survive, gruesome ones bleed.

The difference? Great companies have pricing power, low capital needs, and moats that widen over time. Good businesses work hard just to stay in place. Gruesome ones promise growth but devour capital and never generate real cash.

Most investors chase the gruesome dressed up as great. The hardest skill isn't finding winners — it's avoiding the slow bleed of mediocrity wrapped in a good story.

Time reveals everything. Compounding only works if the underlying machine actually works.