About forty years ago Buffett experienced a Damascene conversion
Economic performance focuses on effective use of the capital invested in the company
Some companies are in the seemingly fortunate position that they can maintain profit margins simply by raising prices.
Superb companies produce a very high return on capital. But when substantial intangible assets don’t show up on balance sheets, the ROC numbers are unduly flattering to management.
Book Value – Ain’t what it used to be – With the rise of company investment in intangibles, book value is losing its relevance.
Something over 80% of the market capitalization of the S&P 500 is made up of intangibles. Only a fraction of that appears on balance sheets.