When we buy a stock, we always think in terms of buying the whole enterprise because it enables us to think as businessmen rather than stock speculators. So let’s just take a company that has marvelous prospects, that is paying you nothing now where you buy it at a valuation of $500 billion…. To deliver, let’s assume that there’s only going to be a

Personal freedom allows us sufficient time to think. Making good decisions requires quiet time alone in our heads to think through a problem from multiple points of view. Uninterrupted personal time is life’s most valuable limited resource. Several notable creators, including Bill Gates and Mark Zuckerberg, regularly take “think weeks” to invigorat

Edward Chancellor’s book Capital Returns helped

Superforecasting, Philip Tetlock and Dan Gardner

Profit before tax/average net fixed assets.

Study the science of art. Study the art of science. Develop your senses—especially learn how to see. Realize that everything connects to everything else. —Leonardo da Vinci

This leads us to the discussion regarding the appropriate starting point for the cost-of-capital number.

What is the normalized earning power of the business?

An investor with 14 percent average annual return (20 percent, 40 percent, 20 percent, −50 percent, and 40 percent) over a five-year period underperforms someone with 9 percent average annual return if the latter is consistent every year.