A great read. One thing troubles me is that "great businesses" that make more money for their owners and raise prices for customers, seem to be less socially u

A great read. One thing troubles me is that "great businesses" that make more money for their owners and raise prices for customers, seem to be less socially useful than the others, such as those in the airplane industry. Here's the arithmetic for the 15% pa business, paying 35% tax, annually vs. after 30 years: 1.15 ** 30 = 66.2117720; * .65 = 43.0376518 1.0975 ** 30 = 16.2980583 BTW: My Buffett-based investment approach is to get the total stockholder equity from a while ago (eg. a decade) and now, and calculate its annual growth rate [1], a kind of $-acceleration. Then qualitatively understand what makes the business profitable, and consider whether those factors are likely to continue for x years. Finally, use the growth rate to project x years into the future, and compare with investing in an index fund; but normalize by today's price of the stock (ie you usually pay more than $1 for $1 of shareholder equity). You can see how long it will take before the stock outperforms the index. If it does, with a margin of safety, buy it. [1] It doesn't account for dividends, and includes valuations of IP and goodwill (which are opinions, not cash), and I'm sure has other flaws. It's crude, but accurate enough if you use a margin of safety; I tend to think more precision is spurious and misleading, like those 7 decimal places above. Does it work? I've looked at about 10 likely companies, but only one looked really good (30% pa growth rate, and an artificially low price due to bad news). After 5 years, my return today is 212.20%, ie it's worth over 3 times what I paid (and that's ignoring its dividends). Theoretically, it would be 1.3 * * 5 = 4.7, but I paid more than $1 for $1 of equity; the growth rate subsequently dropped to 25% (which is still fantastic!), and the current market is a bit low. So, the margin of safety is important.