Jakobsen: “Stash Your Cash & Use It Later”
by Tyler Durden
ZeroHedge.com
06/25/2015
Capital should always be allocated to the “marginal cost of capital”. The stock market in its most simple form is really an input–output black box: In goes the “cost of capital” – out comes “profit”. No one can disagree that, over the long- and medium-term, it’s the profit which both explains and drives stocks best. The most profitable companies get the best stock returns… which brings us to the “dilemma” of today’s market: The marginal cost of capital is significantly higher.
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