Joel Greenblatt: Investors Should Search For Companies That Achieve A High Return On Capital | Value Investing News

Joel Greenblatt: Investors Should Search For Companies That Achieve A High Return On Capital

  • In short, companies that achieve a high return on capital are likely to have a special advantage of some kind.
  • Businesses that don’t have anything special going for them (such as new or better products, well-known brand names, or strong competitive positions) are likely to earn only average or below-average returns on capital.
  • They’ll keep competing until returns on capital are driven down to average levels.
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