Howard Marks bad advice or misunderstood
Now we are looking for good companies, not just cheap companies.
Now we are looking for good companies, not just cheap 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.
Unless management holds the major part of their family net worth in shares of the company there is a serious potential agency problem
There won’t be many seven footers out there. The vast majority of stocks don’t measure up and can be ignored.
The vast majority of wealth creation comes from a reasonably sized cohort of successful companies. The trick is to identify these wonderful businesses.
The best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return
If the job has been correctly done when a common stock is purchased, the time to sell it is – almost never
Buffett analyzed companies more subjectively than Graham, and he found intrinsic value in companies, such as See’s Candies, that Graham would not have touched.
Today everyone is fretting about inflation and the potential for a recession. Trying to decide on the outlook for these macro-economic things can be a distraction.
Inactivity strikes us as intelligent behavior
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