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Competitive Advantage

We seek to own shares of companies with durable competitive advantage. If maintained, a company should consistently generate cash at a rate in excess of its cost of invested capital, generating economic profits. Competitive advantages ward off continual threats that pressure profitability. Compounding economic profits over time creates wealth. The magnitude of compounding is so surprising that Einstein said that it was the eighth wonder of the world. What can one expect from long term ownership of this type of company? We evaluated the stock performance of a list1 of companies derived from the Value Line universe of companies between 2003 and 2012 that had an average Return on Equity of 20%

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The opinions expressed herein are those of Redmond Asset Management, LLC (RAM) and are subject to change without notice. Past performance is not a guarantee or indicator of future results. Consider the investment objectives, risks and expenses before investing. You should not consider the information provided on this website as a recommendation to buy or sell any particular security and should not be considered as investment advice of any kind. RAM was established in 2005 and is registered under the Investment Advisors Act of 1940. Additional information about RAM can be found in our Form ADV.  

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