Berkshire Hathaway – Long-Term Competitive Advantage

“Long-term competitive advantage in a stable industry is what we seek in a business.  If that comes with rapid organic growth, great.  But even without organic growth, such a business is rewarding.  We will simply take the lush earnings of the business and use them to bu similar businesses elsewhere.  There’s no rule that you have to invest money where you’ve earned it.  Indeed, it’s often a mistake to do so: Truly great businesses, earning huge returns on tangible assets, can’t for any extended period reinvest a large portion of their earnings internally at high rates of return.”

Berkshire Hathaway – Letters to Shareholders, p. 584

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