The Unfashionable Truth About Growth
Let’s be honest, patience is not a virtue many investors possess. Yet, the mathematics of growth are brutally simple. A company that reinvests its profits to grow earnings by 25% a year could, in theory, double its value in under three years. Your reliable, dividend-paying stalwart, chugging along at 5% growth, might take a decade or more to do the same. The difference is staggering.
Look at the giants of today. Amazon spent years reporting minimal profits, and the market’s old guard scoffed. What they missed was that Jeff Bezos wasn’t building a bookshop, he was building an empire of logistics and cloud computing, brick by painful brick. Microsoft could have sat back and milked its Windows monopoly for eternity. Instead, it poured billions into becoming a cloud computing titan. This wasn’t luck, it was a deliberate, capital-intensive strategy focused entirely on the future. These companies chose expansion over appeasement, and the investors who understood that were rewarded handsomely.