Investors who research and buy individual companies are becoming increasingly rare, according to Larry Cunningham in an interview with Wealthtrack.  The most obvious example is Warren Buffett, famous for buying quality companies for the long-term, but he’s less famous for seeking out quality shareholders, something that is important to a company’s long-term success.

Cunningham defines quality as companies that are able to sustain their prosperity indefinitely, and says that though these types of durable companies have become rarer, there are still many that do exist. He points to Unilever as an example; more than 100 years old, it has a vast reach globally and has a lot of competitive strength due to the durability of its brands.

When asked if that kind of sustainability is possible in a tech or industrial company, Cunningham said he believes it is, citing 3M as an industrial that is experimental, research-driven and intellectual and attracts the kind of investor who appreciates that sort of company culture. And while tech like Apple may occasionally stumble, they add on capabilities regularly, which investors will pay up for. “I think you can find quality companies in any sector potentially,” Cunningham added, advising a focus on features that signal durable economic advantage for the foreseeable future.

While quality investing is hunting for companies with these durable qualities, quality shareholders are investors who hunt for them, then buy and hold on to them for a long period of time. When Warren Buffett first came on the scene, he announced his intent to attract high quality shareholders, and he’s been incredibly successful in that goal. These shareholders pay attention to the company, not the stock price, and hold for the long-term, often forever. This cohort only makes up only about 15-20% of the market, because shareholders find it harder stay focused on the long-term.

The biggest advantage to having a cohort of quality shareholders, Cunningham continues, is to validate managerial strategy. On the retail level, 30% of public equity is owned by individuals, and Cunningham’s advice is to take a long-term approach, and have a significant part of your nest egg in an index fund. But it’s absolutely rational to invest in a small number of stocks that you can understand and believe in.