Opportunity Cost
The cost of any investment is the best alternative it displaces, not the dollars it consumes. Buffett and Munger apply it as a hurdle: a new idea must beat buying more of the best existing holding, or the answer is no. Judged against that bar most pretty-good opportunities are quietly expensive.
5 books · 2 people behind it · 4 resources
Start here
- Economics in One LessonHenry Hazlitt, 1946
- Basic EconomicsThomas Sowell, 1999
- The OutsidersWilliam N. Thorndike, 2012
The people behind it 2
Each person holds a book in this entry or names it in their own tags.
Investors 1
Academics 1
Resources 4
- Cost of CapitalMichael J. Mauboussin · paper · The hurdle every alternative use of capital must clear.
- Capital AllocationMichael J. Mauboussin · paper · Ranking uses of capital against the best alternative.
- An Owner's ManualWarren Buffett · essay · Berkshire's economic principles, including opportunity cost.
- Explore or Exploit?Shane Parrish · essay · The opportunity cost of sticking with the known.
