Ann: Sales & Profit Announcement, page-4

As I remind my investors, if you can find a company that can generate 10% profit growth whilst paying out 50% of its earnings, provided the earnings multiple doesn't change too violently, you will earn about 15% through time.

If the dividend is fully franked, you'll actually earn a shade over 17%...

If you can pick up most of your holdings at times when the business is trading below its historic multiples, you may be able to get closer to 20% annually should it trade nearer to that historic multiple later.

Very few will dispute that a 20% annual return does extraordinary things for an investor. To demonstrate, set out below are the original purchases of Berkshire Hathaway by the Buffett partnerships 55 years ago:



The intervening years have seen the stock go from $7.50 to around $280,000, which is actually just a shade over 21%. But you get the drift... - Eternalgrowth