The Ideal Business by Warren Buffett

[Rafal]

from "The Snowball - Warren Buffett and the Business of Life"

What is the ideal business?

"The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine. So ... if you could put a hundred million dollars into a business that earns twenty percent on that capital -- twenty million -- ideally, it would be able to earn twenty percent on a hundred twenty million the following year and on a hundred forty-four million the following year and so on. You could keep redeploying capital at [those] same returns over time. But there are very, very, very few businesses like that... we can move that money around from those businesses to buy more businesses"

Warren Buffett

 

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