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Politics : Ask Michael Burke
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To: Don Lloyd who wrote (66700)8/24/1999 10:32:00 AM
From: Freedom Fighter  Read Replies (1) of 132070
 
Don,

>>Do you have any reservations about this?<<

Nothing major.

I do sort of think there should be some spread between the theoretical risk free rate of return and the return on capital for the average business. Otherwise why take the business risk?

I also think there are a "few" businesses that have sustainable advantages due to a superior business model or position, superior and hard to duplicate products, size, almost monopoly position etc... that allows them to earn above average returns on capital over very long periods of time. (ex. Coke) This is goodwill.

Upon thinking about it further I'd also like to amend my previous post in that I think the savings level would also be important in determining cost/returns on capital.

I'm not sure I'm answering you though.

Wayne
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