Ep 423. The Warren Buffett Way: Mastering the Art of Capital Allocation
Focused Compounding
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The Buffett Test and Capital Reallocation
The chapter discusses the concept of the Buffett test and the importance of capital reallocation. It explores the significance of focusing on return on capital and explains how reducing capital in underperforming businesses can increase overall returns. The chapter also emphasizes the difficulty of finding new high-return opportunities compared to eliminating low-performing assets.
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