Ep 121. Investing in Stocks: ROC, ROE, ROIC, ROIIC
Focused Compounding
00:00
How to Calculate Returns on Capital
Munger: It's easy to calculate, but better than that is to actually think about it in terms of how the business works and things like that. In his experience, companies' businesses rarely change from being something that had a high return on capital early in its history to having a low one in the future or vice versa. "If a company needs a lot of inventory, that's probably almost always going to be the case even for a long period"
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