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If the price of the company keeps going up, you earn higher returns.
If the price of the company remains the same, you get a growing for the same price.
If the price of the company goes down, you get a growing company for a cheaper price.
Cash is too much of a drag on overall returns.
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Warren Buffett would arguably have done better if he were willing to pay up for good companies - He had always been willing to pay a slight premium for a good company (one with a deep moat", which is the rationale for his famous quote " It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
But whether he can identify enough good companies within his "circle of competence" is a different story
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W.B.'s strategy could be flawed,
he trails the SP 500 over 5 years and over 10 years currently,
evidencing maybe one more time, that neither stock picking nor market timing are
possible over long term.
https://www.ft.com/content/00c722d6-760f-4871-a...