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The Equitymaster Research Digest

Is No Investment the Best Investment?
May 27, 2016

  • Unconventional wisdom
  • An Intangible Asset
  • Fictitious Claims

When it comes to investing wisdom, it doesn't get better than Warren Buffett's letters to shareholders. They have the power to completely change the way you invest.

For example, the letter from 1983 revolutionised my understanding of companies.

Until then, I had very little understanding of why certain companies utilise their assets more efficiently than others. I always wondered why they traded at a significant premium compared to the rest of the investable universe.

In a way that only he can, Buffett made me see the light. He explained that it has to do with the assets a company has on its books.

The best long-term performers are companies that require few assets.

Statistical Proof

An article in the Wall Street Journal called companies that don't invest the ideal investment.

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