Discovery consists in seeing what everyone else has seen and thinking what nobody has thought.

~ ALBERT SZENT-GYORGYI

 

 

What investments do we find attractive?  Very simply, we look at a stock as if we are evaluating a business, not merely a piece of paper that fluctuates in price.  The business must be attractive.  It must generate a high cash return on its invested capital.  Generally, the businesses that appeal to us do not require huge amounts of capital to maintain their profitability.  We prefer that a company generate excess cash, not consume additional capital.  If the only way a business can generate increasing net income is to retain and reinvest a growing percentage of its earnings, we are not interested.