--- title: "Meaning & Key Takeaway of: Over the long term, it's hard for a stock…" description: "\"Over the long term, it's hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on..." image: "https://sms4smile.com/quotes/i/48b/charlie-munger-458_business_over-the-long-term-it-s-hard-for-a-stock_2784038.jpg" --- # Over the long term, it's hard for a stock to earn a much… ![“Over the long term, it's hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you're not going to make much different than a six percent return - even if you…” quote by Charlie Munger](https://sms4smile.com/quotes/i/48b/charlie-munger-458_business_over-the-long-term-it-s-hard-for-a-stock_2784038.jpg) [Download](https://sms4smile.com/quotes/i/48b/charlie-munger-458_business_over-the-long-term-it-s-hard-for-a-stock_2784038.jpg) [Open image](https://sms4smile.com/quotes/i/48b/charlie-munger-458_business_over-the-long-term-it-s-hard-for-a-stock_2784038.jpg) > “Over the long term, it's hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you're not going to make much different than a six percent return - even if you originally buy it at a huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you'll end up with one hell of a result.” [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Long‑term stock returns mirror the underlying business’s return on capital; high‑return businesses outperform even at premium prices, while low‑return ones lag despite discounts. **In simple terms:** Stock returns follow business performance over time. Key Takeaway Invest in businesses with strong, sustainable returns. Themes investing business fundamentals long‑term perspective Mood cautious analytical Type advisory educational When to use this quote - portfolio construction - retirement planning - wealth building - stock selection Key Concepts return on capital compound growth valuation discipline Questions to Reflect On - How do you assess a business’s durable return on capital? - What margin of safety do you require for high‑price purchases? A Different Perspective High returns may be hard to sustain; market cycles can affect outcomes. ★ ★ ★ ★ ★ No ratings yet [Business](https://sms4smile.com/quotes/about/business/) [Customer](https://sms4smile.com/quotes/about/customer/) [Hell](https://sms4smile.com/quotes/about/hell/) [Investing](https://sms4smile.com/quotes/about/investing/) [Long term](https://sms4smile.com/quotes/about/long-term/) [Twenties](https://sms4smile.com/quotes/about/twenties/) ## Related quotes > [We're in the '100 percent return' business. 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