“Time is the friend of the wonderful business.” The spirit of that famous sentence should be part of the touchstone inquiry before ever contemplating any type of investment. If you are sure that the asset you purchase will be selling more goods or services ten years from now at higher prices, and thereby earning more profits, you’re already well on the path to investment success. The only remaining impediments to watch out for are (1) overpaying and (2) buying something with an over-leveraged balance sheet.
I had this on my mind when I observed much of the attention the investor community is giving to the called-off merger between Office Depot (ODP) and Staples (SPLS). If you are investing with a 5+ year time horizon, you should be living your life as if these companies don’t exist.
These are both companies that, over the long term, will eventually experience some type … Read the rest of this article!