A good way to think about LT stock returns

Total Return = Sales Growth x change in Margin x change in Multiple + Dividend Yield

Changes in Margins and Multiples tend to be cyclical, so LT Sales Growth mostly determines LT returns.

A good way to think about LT stock returns

Total Return = Sales Growth x change in Margin x change in Multiple + Dividend Yield

Changes in Margins and Multiples tend to be cyclical, so LT Sales Growth mostly determines LT returns.

Following the latest news may be fun, but it can seriously hurt your investment returns.

Instead, focus on what truly drives long-term returns: the behavior of a company's customers.

Forget about a company's COMPETITIVE advantages.

We need to focus on a company's CUSTOMER advantages.

What causes customers to return?

Customers are the ones who deliver cash flows to a company and its shareholders.

This simple truth is often overlooked by investors.

This simple truth is often overlooked by investors.

If buybacks are value accretive, then each additional share will be more expensive. Hence, it will be increasingly harder to buy back the same proportion of of shares each year.

So, this statement seems rather strange.

Looking forward to reading this book !

Luca Dellanna

Looking forward to reading this book !

Luca Dellanna

If buybacks are value accretive, then each additional share will be more expensive. Hence, it will be increasingly harder to buy back the same proportion of of shares each year.

So, this statement seems rather strange.

What we learned about market shares was wrong.

Higher market shares don't lead to higher profitability (analysis by Dan Rasmussen).

It supports the thesis of my forthcoming book that we need to invest in another type of moat, one centered around customers.

Want to know which book likely made Buffett buy Buffalo News in 1977?

from a 1946 (!) book:

'... a virtual disappearance of competition in most cities.'

'Of all cities having newspapers, only 8.4 per cent had competition in 1945.'

A FASCINATING read !

This piece of research landed on my desk in 2002.

Since then, I have found it to be one of the most influential pieces I have read.

This piece of research landed on my desk in 2002.

Since then, I have found it to be one of the most influential pieces I have read.

How to compound your knowledge.

Read books, articles, etc. that have a long shelf life.

Your time is valuable, focus on the things that are timeless: frameworks, concepts, mental models, etc.

And most of all: skip daily noise.

How to compound your knowledge.

Read books, articles, etc. that have a long shelf life.

Your time is valuable, focus on the things that are timeless: frameworks, concepts, mental models, etc.

And most of all: skip daily noise.