An essay about this investment blog in 1000 words

He observes that while equities historically outperform bonds over multi-decade periods, the vast majority of individual public stocks actually underperform simple Treasury bills. This reality does not mean an investor must undergo the exhausting task of discovering the next speculative multi-bagger. Instead, Smith argues that long-term wealth creation is driven by identifying and maintaining ownership in a reasonably sized cohort of fundamentally exceptional businesses.

Problems with the most popular indicator of superb companies

From its growing operating cash flow, it is able to fund growing capital spending and also fund growing R&D expenditures. Of note, it seems to be able to maintain and even improve its operating margins. It is easily able to fund the capex needed to maintain it long-term competitive position in its various markets. It is also easily able to fund the capex it chooses to make to grow the company and fund healthy R&D expenditures.