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Thread on ‘capital allocation’.
1/ The Buffett shareholder letter has got me thinking about what a great capital allocator he has been at #BRK. One of the best ever. Henry Singleton, Tom Murphy & a few others are right along side him.
1/ The Buffett shareholder letter has got me thinking about what a great capital allocator he has been at #BRK. One of the best ever. Henry Singleton, Tom Murphy & a few others are right along side him.
2/ A great capital allocator in my opinion can be correlated with long-term market outperformance. @chriswmayer makes this case in his book #100baggers. William Thorndike hammers the point in #theoutsiders
3/ So what are the capital allocation decisions that made #Buffett and others so great? And how can we identify a CEO that can allocate effectively?
Why is booking a 100 bagger so tough?
Because our ability to think that far into the future is insanely hard. AND it’s new to us.
It was only in the last 500-600 hundred years have we been able to think far in the future. (20+ years)
A thread...
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Because our ability to think that far into the future is insanely hard. AND it’s new to us.
It was only in the last 500-600 hundred years have we been able to think far in the future. (20+ years)
A thread...
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The median time for a stock to return 100 to 1 in a recent study was 26 years. A 20% compounded annual return for 25 years will earn you 100x
However, 20% compounded for just 20 years gets you 40x
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However, 20% compounded for just 20 years gets you 40x
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Back to the history. In medieval times, humans were consumed with their part in society and everyday life. Reaping. Sowing. Disease. War and Peace.
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