Buying This Boring Monopoly With 5X Potential!
All you need to generate amazing returns are: Future-proof business, giant moat and pricing power. This business has all three and it's trading at a very attractive valuation now.
I have obsessively went through nearly all public records of the Berkshire Hathaway Annual Meetings and I think this is best advice Warren Buffett ever provided in those meetings:
“If you find something that will be around 20 years from now, you will likely make very good money off it.”
As I read more of Buffett, Graham, Munger and made investment decisions myself, I grew more and more fond of his one sentence strategy.
It captures essential drivers of economic growth:
Inflation.
Population growth.
So, if a company stays alive for a long period of time, it probably sells more people at higher prices, which is mostly enough for you to make a good return on your investment provided that you didn’t overpay for it. That happens even if productivity remains stable in that period.
There are several such companies in the world and most of them are in the US.
Unfortunately, the US market is largely overpriced right now while Europe and the United Kingdom remain relatively cheap.
This is why I have been diversifying away from the US for a while now and I have just invested in a UK company that will endure for at least the next 100 years, not just 20.
It has 57% gross margin.
It has a monopoly over the products it sells.
It grew revenues 25% annually in the last 5 years.
Best? It is trading at just 14 times earnings despite having gone up 150% in the last 5 years.