“Inflation acts as a gigantic corporate tapeworm. That tapeworm preemptively consumes its requisite daily diet of investment dollars regardless of the health of the host organism. Regardless of a company’s profits, it has to spend more on receivables, inventory, and fixed assets to simply equal the unit volume of the previous year. The less prosperous the enterprise, the greater the proportion of available sustenance claimed by the tapeworm. Asset-heavy businesses with meager returns on equity have no leftovers to spend on expanding, paying down debt, issuing dividends, or making acquisitions. The tapeworm of inflation simply cleans the plate.” – Warren Buffett
The Editors’ Quote of the Day:
