In other words,
I'm here to reiterate that great investor rule
number two remains owning productive assets.
You must own those assets that generate
real value and cash flow for you.
This is not a time to be sitting in unproductive assets.
This is not a time for a head in the sand type of a situation.
You need to produce returns in excess of inflation and importantly,
in excess of your cost of capital.
But again,
we need to make sure they provide attractive risk adjusted returns.
So one of those productive assets that we love
that are very accessible to all of us are owning
public shares in the world's best businesses.
And those world class businesses that can
produce and compound their earnings over many,
many years at very high rates
are highly productive assets for us to own.
Here's some of the attributes that of course we're looking for.
If you're capital efficient,
you can return,
you can reinvest into your business at high rates
without requiring a lot of heavy capital to do so.
We want them to be durable,
growing franchises.
Both of those words are important.
We want to have attractive profit margins and returns on
investment for every next unit of work that this business does.
We want to get a good profit from it.
We need talented
effective leaders.
This is the part that AI or a model can't figure out.
Capital allocation decisions are
mission critical to how investments do.
