#9 Two Capital Cyclists
Behind the Balance Sheet
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Capital Cycles
Capital account wa got you interested in that subject on capital returns. I was perplexed by why these companies were growing so fast in reasonably mature industries, and the answer was the cu ratio. If your market value is three times the cost of building things, you can create three dollars of shareholder value by spending one dollar of capital. That's what they were all doing, and compounding it in a preasion crisis by borrowing h foreign currency terms and not hedging the currency. So the earnings were inflated on top of the impending doom of over supply, which duly arrived in 19 98. Seven seven cors re. And i did call it roughly right? That was the name of the beer
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