What Is Growth Worth?

Take a look at the table and graph given below. Company A earns $10 every year and has a payout ratio of 100%. Company B earns $10 and has a payout of 50%. It reinvests the remaining 50% to engender its growth. Company A doesn’t grow at all and B grows at a constant rate of 5%…

Calculating Maintenance Capital Expenditure

The earnings that you can take out of the business every year without affecting its competitive position is called as Owner Earnings. I wrote about it in detail here. This term was coined by Warren Buffet and the formula for calculating it is given below. The capital expenditure (capex) he refers to is maintenance capex and…

Think in Images

Take a look at the table given below. Which sentences comes alive to your mind’s eye when you read? If you’re not an alien then chances are very high that you will find the sentences on the right hand side more vivid and easier to remember. Why is that? These sentences contains phrases like (1) kiss…

Before I Go to Sleep

Every time I read The Little Book of Talent there’s something new to learn. While rereading the book few days back, I came across the paragraph given below. Think of your windshield as an energy source for your brain. Use pictures (the walls of many talent hotbeds are cluttered with photos and posters of their…

Repco Home Finance

Abraham Maslow was an American psychologist who was well known for creating Maslow’s hierarchy of needs pyramid. He studied the behaviors of exemplars like Albert Einstein. And wanted to understand why some people could attain such unbelievable heights, while so many others continue to struggle. He explained this difference with hierarchy of humans needs pyramid.…

VST Tillers

In the first decade of the 21st century, the population of the world produced more economic output than the first nineteen centuries combined. How did we achieve this tremendous feat? In the last two centuries we learnt to augment muscle power with efficient energy sources like oil, natural gas, and atoms. We invented new machines which used these energy…

John Deere

During the early 19th century, farmers in Midwest America struggled with their cast-iron plows. Most of the plows were made in Northeast America and it didn’t suit the sticky Midwest soil. The dirt from the soil caked on their plows and the farmers ended up spending most of their time cleaning the mud from plows.…