Every now and then, I come across a company that has made real, sustainable profits and has served as the perfect intergenerational holding, making any investor that holds onto it for the long haul much richer than those who would have gone the traditional route exclusively with index investing.
Typically, these types of investments have some type of “moat”, that is, a characteristic that allows the business to charge a premium rate that a low-cost competitor cannot touch. This results in the business earning high returns on capital while retaining its competitive advantage over the long haul. The company that I have recently identified earns 20% operational returns while retaining its competitive advantage that has grown over time as its industry has largely consolidated.
The company that I identified has a track record of almost 27% annual returns dating back to 1948, 14.5% annual returns dating back to 1987, earns … Read the rest of this article!