Edward Quince’s Wisdom Bites: Nomads and Motorcycles: The Perpetual Quality Machine

Welcome back to the digital saloon, where we trade fleeting forecasts for timeless wisdom. Today’s topic: how a discount retailer and a philosopher on a motorcycle ended up searching for the same thing — Quality.

Today, we delve into the heart of value, a concept often buried under balance sheets and noisy quarterly reports. The great investors at Nomad Investment Partnership eventually evolved from searching for "cigar butts" to prioritizing "near permanent holdings". They focused on businesses like Costco, which they described as a "Perpetual Growth Machine" built not on clever financial engineering, but on a virtuous cycle rooted in low costs and customer loyalty.

But how do you identify such a machine?

This is where the Nomad philosophy quietly aligns with Robert Pirsig’s profound inquiry into "Quality". Pirsig describes Quality as something you inherently know—some things are simply better than others—yet it remains undefinable. It is the force that generates everything we know; it is the soul, self-moving.

In the realm of business, this undefinable Quality is often expressed through superior attitudes and genuine care. Pirsig reminds us that true excellence emerges when the goal shifts from just trying to earn a grade to valuing the knowledge itself. Similarly, the Nomad framework looks beyond just the earnings, focusing intensely on business models. They sought organizations that fundamentally worked "very, very hard to be able to offer customers low margins" (the Amazon/Costco model), recognizing that this dedication to efficiency and value is difficult to replicate.

The question for us, as observers of the markets and architects of our own lives, is: Are we optimizing for the quantitative metric (the "grade" or the quarterly return), or are we investing in the qualitative force—the Quality—that makes the metric possible?

The Financial Takeaway:

The deepest insight often comes from asking why something works so well, even if you can't perfectly define the answer. True Quality businesses survive because they focus on enduring values—like treating the customer as king. Stop chasing transient data points and look for the inherent Quality in the business model, the leadership, and the customer experience. This dedication to excellence is often found not in complex analysis, but in "simple ideas, and taking them seriously".  

Maybe the lesson is that excellence compounds the same way capital does — quietly, patiently, through care. The spreadsheet records it only after the fact.