The best investment is in the business that compounds the fastest while requiring the least capital. Most people think about return on capital. They should think about return on capital per unit of risk taken.

The difference between a good business and a great business is that a good business earns a fair return on capital employed, but a great business earns exceptional returns on capital while reinvesting at those same exceptional rates.

The difference between a great business and a mediocre one is often that the great business keeps compounding capital at high rates of return for decades, while the mediocre business cannot. Most people underestimate how powerful this difference becomes over time.

The best thing a company can do is compound capital efficiently over a long period of time. Everything else is details.

The best thing a company can do is compound capital efficiently over a long period of time. That's what creates shareholder value. Most companies don't do it because they're distracted by quarterly earnings, acquisitions that destroy value, or just bad capital allocation decisions.

The best thing a company can do is compound capital efficiently over decades. Everything else is noise.

The best thing a public company can do is nothing. The second best is to buy back stock when it's cheap. The worst is to overpay for acquisitions or go on acquisition binges.

The best way to think about capital allocation is not how much money you make, but how much of what you make you keep. Most people focus on the former and ignore the latter, which is why they stay poor.

The best thing a public company can do with excess cash is repurchase stock when it trades below intrinsic value, but the worst thing is to repurchase stock when it trades above intrinsic value. Most companies do the latter.

The best way to think about capital allocation is not how much money you make, but how much you keep after you've paid taxes, inflation, and the cost of maintaining your standard of living.

The best thing a public company can do is repurchase stock when it's trading below intrinsic value—but the worst thing is to repurchase stock when it's trading above it, which happens far too often because of executive compensation incentives.

The first rule of compounding: Never interrupt it unnecessarily. The second rule of compounding: Never interrupt it unnecessarily.

The best thing a public company can do with cash is buy back stock when it trades below intrinsic value. Everything else is just noise.

The best way to think about capital allocation is not how much money you make, but how much you keep after accounting for the permanent loss of capital. Most investors focus on returns; the best ones obsess over never losing what they've built.

The best way to think about capital allocation is that you're trying to earn the highest return on incremental capital. Most managers think about average returns; the great ones think about marginal returns.