Money and Finance
Via the book Capital Account:
- Fade Rates And The Capital Cycle...
From Capital Returns (the excerpt below was from a Marathon letter in March 2014):Marathon looks to invest in two phases of an industry’s capital cycle. From what is misleadingly labelled the “growth” universe, we search for businesses...
- The Tenets Of Capital Cycle Analysis
From Ed Chancellor in his introduction to Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15: The essence of capital cycle analysis can thus be reduced to the following key tenets: Most investors devote more time...
- More From Ed Chancellor On Focusing On Industry Supply...
From his introduction to Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15: FOCUS ON SUPPLY RATHER THAN DEMAND Given that the future is uncertain, why should Marathon’s approach fare any better? The answer...
- Investors Should Be Thinking 90% About Supply...
In one of the interviews Edward Chancellor gave recently, he made the comment below, which I think was probably the most practical investing lesson that can be used going forward:Ed: And this interesting point is that people, I don’t quite know why,...
- Incentives, Downsizing, And Value Creation At General Dynamics (august 1994 Paper)
This looks like an interesting paper, and it reminded me of THIS previous post/quote. Link to paper: Incentives, Downsizing, and Value Creation at General DynamicsIn 1991, defense contractor General Dynamics engaged a new management team which adopted...
Money and Finance
Edward Chancellor quote
Via the book Capital Account:
The turnaround of General Dynamics [from 1990-1993] and its dramatic share price performance illustrate two key aspects of the capital cycle approach to investment. First, shareholder returns are not necessarily determined by whether a company’s sales are rising or falling, nor whether the market in which it operates is growing or shrinking. Rather, the most important determinant of share price performance is management’s ability to allocate resources efficiently. If a company achieves a higher return on reinvested profits than the market has expected, then its shares will rise, regardless of what happens to turnover. Secondly, during the early 1990s General Dynamics benefited from the decline in competition in the US defence industry, as capital was withdrawn from the sector and businesses consolidated. This illustrates the second axiom of the capital cycle, namely that profitability is determined primarily by the competitive environment or the supply side, rather than by revenue growth trends. It is better to invest in a mature industry where competition is declining than in a growing industry where competition is expanding.
- Fade Rates And The Capital Cycle...
From Capital Returns (the excerpt below was from a Marathon letter in March 2014):Marathon looks to invest in two phases of an industry’s capital cycle. From what is misleadingly labelled the “growth” universe, we search for businesses...
- The Tenets Of Capital Cycle Analysis
From Ed Chancellor in his introduction to Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15: The essence of capital cycle analysis can thus be reduced to the following key tenets: Most investors devote more time...
- More From Ed Chancellor On Focusing On Industry Supply...
From his introduction to Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15: FOCUS ON SUPPLY RATHER THAN DEMAND Given that the future is uncertain, why should Marathon’s approach fare any better? The answer...
- Investors Should Be Thinking 90% About Supply...
In one of the interviews Edward Chancellor gave recently, he made the comment below, which I think was probably the most practical investing lesson that can be used going forward:Ed: And this interesting point is that people, I don’t quite know why,...
- Incentives, Downsizing, And Value Creation At General Dynamics (august 1994 Paper)
This looks like an interesting paper, and it reminded me of THIS previous post/quote. Link to paper: Incentives, Downsizing, and Value Creation at General DynamicsIn 1991, defense contractor General Dynamics engaged a new management team which adopted...