Apple Juice Investing: Do You Know Your Cost of Capital?


(Dinesh Sairam) #1

The trouble isn’t that we don’t have a hurdle rate – we sort of do – but it interferes with logical comparison. If I know I have something that yields 8% for sure, and something else came along at 7%, I’d reject it instantly. It’s like the mail-order-bride firm offering a bride who has AIDS – I don’t need to waste a moment considering it. Everything is a function of opportunity cost.” - Charlier Munger.

I’m very interested in understand the ‘Cost of Capital’ of everyone in this forum. How do you arrive at it? Do you use any of the methods mentioned in my blog post? Do you have a different method?

Discuss away.