Nebraska Furniture Mart case study - learning points

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Previous newsletters this week have told the story of yet another successful Buffett investment, but now is the time to draw the key points for investors today to take with us.  I’ve jotted down a few here.  You might like to add to the list.

  1. If you spot a good business it might be worthwhile following its fortunes over many years even if you are prevented from buying either because it is too expensive or the owners don’t want to sell.
  2. Low-cost producers can be good investments. Low cost and low margin combined with extensive range can lead to both great customer benefits and high returns on capital once the company is dominant in its area (geographical or product area).
  3. Look beyond this year’s earnings when valuing a company. Reported earnings must be seen in the context of potential for profit growth together with capital investment requirements. This, in turn, depends on whether there is a protective moat around the economic f…………………To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here

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