Buying quality businesses means harnessing the momentum and scale advantages of their sustained growth

In the long run, a stock's return is unlikely to exceed the average annual earnings of the company that issued it by much. If a business has earned a 6% return on capital over 40 years, you can expect a return during those 40 years that is not significantly different from 6%, even if you originally purchased the stock at a substantial discount to its book value. Conversely, if a business has earned an 18% return on capital over the past two or three decades, you will likely earn a very attractive return on your investment, even if you originally paid a high price for the stock.