In this video, we share the 8 rules that define how we invest at Solidarity Wealth. From avoiding the hype to partnering with great leadership teams, these principles guide every decision we make on behalf of the families we serve
This isn’t a pitch or a product, it’s a window into the discipline and care behind our process.
Watch now and see what makes our approach different.
Transcript
Over the years I’ve been asked a lot about how we approach investing at Solidarity Wealth. My answer always comes back to a set of core principles, my eight rules of investing. These aren’t shortcuts or get-rich-quick tricks, they’re the foundation for how we think about owning businesses, managing risk, and staying patient for the long haul.
Rule #1: Buy Businesses, Not Stocks
Rule number 1, we’re buying businesses not trading stocks. When we invest, we’re not collecting ticker symbols on a screen. We’re buying real, operating businesses, ones with products or services people actually value.
Before we invest a single dollar, we ask ourselves, if we had the capital, would we be comfortable owning this entire business outright? That mindset changes everything. It means we dig into the financials, the competitive landscape, and the management team, just like you would if you were buying the shop around the corner.
Rule #2: Invest in Companies That Create Real Value
Rule number 2, we want real companies. Not every company that calls itself a business is one we’d want to own. We’re looking for companies that create tangible value for customers, whether that’s through a product or service people willingly pay for. If management is more interested in chasing the latest fad or parking capital and unrelated assets, that’s not a good use of their time or our money.
We stick with companies where the business model itself generates value, not just the balance sheet.
Rule #3: Avoid the Trap of Fear of Missing Out (FOMO)
Rule number 3, avoid the FOMO trap. Markets love a good frenzy, whether it’s the latest tech craze, can’t-miss trend, or hot alternative asset.
But chasing what everyone else is chasing often means overpaying for hype instead of buying real value. When the crowd rushes in one direction, we step back and ask, what’s being overlooked? Often the best opportunities are in the businesses nobody’s talking about yet.
Rule #4: Be Selective with Investment Opportunities
Rule number 4, be choosy. Just because we can swing at a pitch doesn’t mean we should. And the best part is there’s no three strikes and we’re out. We’re looking for companies with a clear path to compounding value over time.
Businesses that generate cash flow have strong competitive advantages and can reinvest profits to grow. Passing on a lot of “just okay” opportunities means that we have the capital ready for the truly great ones. Opportunities where our swing can mean a home run.
Rule #5: Favor Businesses with Multiple Growth Drivers
Rule number 5, look for companies with multiple ways to win. Some businesses only make money if one thing goes perfectly. That’s not what we want.
We look for companies that have multiple levers they can pull to grow value, whether that’s expanding into new markets, innovating products, or improving operations. The more ways they can succeed, the better for our odds over the long term.
Rule #6: Prioritize Free Cash Flow Over Earnings
Rule number 6, free cash flow is king. Earnings can be massaged, headlines can be spun, but free cash flow (the actual cash left after a company covers its operating expenses and investments) is hard to fake. We love businesses that produce strong, consistent free cash flow. It gives them the flexibility to reinvest in growth, strengthen the balance sheet, or return capital to shareholders.
And it gives us confidence that the business can weather tough markets.
Rule #7: Invest in Management That Thinks Like Owners
Rule number 7, partner with great management. When we buy into a business, we’re also choosing its leadership.
We want managers who think in years and decades, not weeks and quarters. Leaders who treat shareholder capital like their own, avoid waste, and focus on sustainable growth. In other words, leaders who think like owners themselves.
And one more piece to that, what do they do with our capital? Do they reinvest in the business to grow it further? Do they pay down debt? Do they return capital to shareholders through dividends or by buying back the company’s stock at a reasonable price? We want to see thoughtful, disciplined capital allocation that benefits owners over the long haul.
One of my favorite examples here is Warren Buffett. Berkshire Hathaway has only paid a dividend once, back in 1967.
Buffett likes to joke that he must have been in the bathroom when that decision was made. Since then, he’s chosen to reinvest the company’s earnings instead. And that compounding over decades speaks for itself.
That’s the mindset we want to see. Thoughtful, disciplined capital allocation that benefits owners over the long haul.
Rule #8: Let Strong Companies Continue to Compound
Rule number 8, we let our winners run. Owners don’t sell just because something’s gone up in price. If the business is still executing well, we let our winners run. That’s where real compounding happens; over years, not months.
We only sell when something about the business changes that we feel could impair future earnings growth, not just because the calendar says it’s time to rebalance.
Final Thoughts on Long-Term Investing Discipline
These rules aren’t glamorous. They don’t make for flashy headlines, but they work because they’re grounded in common sense and discipline.
At the end of the day, successful investing isn’t about chasing trends. It’s about owning great businesses, partnering with strong leaders, and letting time do the heavy lifting.
I’m Jimmy Mortimer with Solidarity Wealth, and those are my 8 Rules of Investing.
