Morgan Stanley’s paper “The Equity Compounders” has been a huge influence in my investing style.
Here are the main insights👇🏼
Here are the main insights👇🏼
Companies with high cash returns on capital invested outperform those without.
Pricing power is found in a select few sectors (consumer, healthcare, IT) and is a big differentiator in returns.
It’s possible to combine high returns with low volatility.
Overall, as investors we should focus on recurring revenues, wide margins and low capital intensity.
Agree?
Agree?
Here’s the link:
morganstanley.com
morganstanley.com
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