Law #1 – Business Return Determine Investor Return This goes back to the first principles of investing: a share in hand is the same as owning a fraction of the underlying business. When you own a company’s share for 10, 20, or 30 years, your return will be similar to the return of the business. […]
Moat is independent of market size The common misunderstanding for moat like scale economies is that it only exist in large markets. While a company has to reach a certain size to achieve scale advantage, it is in relative to the size of its competitors, not the size of the market. A company that is […]
PDF Version *** In Warren Buffett’s 1965 partnership letter, he gave us a glimpse on how to think about capital allocation: “The question always is, “How much do I put in number one (ranked by expectation of relative performance) and how much do I put in number eight?” This depends to a great degree on […]