What influences share prices?
Here’s my mental model for understanding equity markets.
In corporate finance there are three rules for maximising value:
1. Buy high return assets
2. Finance assets with low cost debt
3. Only return capital to investors if there are no suitable investments
These principles should guide both how managers run their businesses and how investors find and manage investments.
Maximise the highest possible return by investing in the highest returning assets.
What would you add?
https://twitter.com/long_equity/status/1634308890622849030
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