Engine and Vehicle

Don’t put good ideas on a pedestal. A good idea is just an intended destination. To get there, you need an Engine (Capital) and a Vehicle (Container). Fundamental Investing recognises that just because something is a good idea doesn’t mean it will be a good investment. A strong company needs a strong Balance Sheet and control of their Cash Flows. Meaning they need to be both solvent and liquid. To survive the long term, their assets need to be worth more than their liabilities. To survive the short term, their liquid assets (easily available) need to be more than their immediate obligations (payable now). A company with assets that are theoretically valuable may be forced to sell them for far less than they are worth if they have short term obligations that are impatient. The same is true for individuals as is true for good businesses. What you do, isn’t the only thing that matters. Your Engine matters. Your Vehicle matters. Step back. It isn’t just activity that counts. Work on the foundations and the environment in which you create meaning. Create space. Create time. Then create.

Good Ideas need Engines and Vehicles