A great company has a high return on equity. Returns can be in the form of rent, dividends, profits, royalty etc…generated by the business. Equity is the sum of money the company has put in to build this business.
As the return in rent, dividends, profits etc is somehow similar across many businesses, properties or stocks, a good way to achieve a high ROE is by putting in a low equity. This may only be achieved by buying good assets during an economic downturn.
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