Thursday, 22 January 2015

Simple does it Investing

If you should examine the history of how successful CEO became a success for the company they shepherd, you will see a consistent pattern. Their simple objective is to allocate the company's capital where they know with some calculated certainty what the long term return can be provided they allow the passage of time. Patience is indeed a virtue in investing or should I say a prerequisite.

William Thorndike says it best in his book The Outsiders . He looked at eight CEOs, all of which operated outside of Wall Street in a small corner of town. The investing approach is as simple as allocating capital.

Simple does it investing starts off with finding a simple model of allocating capital with enough margin of safety to avoid the permanent loss of capital and satisfy a near certain return on the capital.

Take a look at the link above from Base Hit Investing.

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Feel free to ask questions and make comments.