Most people overestimate what they can do in one year and underestimate what they can do in ten years. But the deeper error is that they plan in one-year chunks at all — the unit of compounding is decades, not quarters.
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The key insight is that permanent capital changes your relationship with time. You're not managing to a fund life; you're managing to the life of the business. That means you can make decisions that are bad for the next quarter, bad for the next year, but right for the next decade.
Vlad Barbalat — Invest Like the Best with Patrick O'Shaughnessy
The rule of thirds is that when you're chasing a dream or doing anything hard, you're supposed to feel good a third of the time, OK a third of the time and crappy a third of the time. If you're within this ratio, then the bad days aren't bad. They just mean you're chasing a dream.
TED
The best businesses we've ever seen are ones where the incremental return on capital is essentially infinite because you don't need capital to grow. And so you have a business that's generating cash and you need to decide what to do with that cash. And most of the time, the best answer is to give it back to shareholders, but sometimes the best answer is to redeploy it into new investments.
Vlad Barbalat — Invest Like the Best with Patrick O'Shaughnessy