I wasn’t planning on a mid-week post, but the nature of investment research as that investment ideas don’t come along in regular, carefully regimented intervals. Perhaps that should be an obvious source of investment research, but I pay close attention to businesses that have multi-decade periods of compounding at a rate of 15% or more annualized. If that type of compounding is maintained for a period of twenty years or longer, there’s a fair chance that some type of competitive advantage is at work and being manifested for the benefit of shareholders.
There is one company, which I have studied on and off, that has delivered returns of over 21% since its IPO in January 1978. Right now, I think there is a strong argument that it is trading at a fair (thought not heavily discounted) price, and that its economic engine that propelled its historical returns remains as much intact today as it has been throughout its super-compounding period. It is one of the few billion-dollar giants that receives almost no attention as an investment, despite trouncing the stocks that dominante CNBC over most multi-year periods.
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