Value Creation

Its been a while since a last wrote a blog on things that matters in the long run.

I have been a big big admirer of business which create value for themselves and by themselves I refer to managers and its stake holders. I was reading Warren Buffett’s early partnership letter last week one thing that just comes out other than his sheer talent and business acumen is that he is very much the same as he admires company to be. what a mean by that , he wanted apart from cigar butt stocks few business which delivers the best value creation through a certain price.

I was reading his letters where he has mentioned quiet a few time that he is happy to close down his partnership if he cannot outperform leading investment firms and Dow Jones YoY basis. He constantly used to compare himself through their returns and through their resources.

Value creation is something which is in the middle of the investment circle for us , I am someone who understand that fully and always always try to see it through real world – business, companies and nations in fact. What really matters is sustained focus and constant improvement as short focus is something which is very very harmful in this kind of business.

I was reading a book yesterday where the author pointed out how important it is to find simple boring companies which are constantly making profit over the years as compared to big conglomerates which have their hands in very pocket. We feel that these giants conglomerates have great asset base and also have enough resources to support their portfolio of companies in any case of calamity. They deliver great value of their portfolio of companies and not to their share holders in the long run. There are some exceptions like Berkshire but you can only have a Warren.

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