Companies small or big must make capital allocation decisions on a frequent basis to maximize returns for shareholders. But only a few companies in the world have excellent capital allocators at their helms, most companies are run by excellent operators who alone are enough to generate meaningful profits, which shareholders would find forgiving enough. Before a corporation invests in machinery, equipment, property or securities, like us they must make comparisons of returns that they’ll get when they allocate capital. These decisions are far more complex than personal decisions as they often involve a giant leap of faith into the unknown. How did Google calculate that Android would be a massive hit when they decided to allocate millions of R&D to it? How did Google’s other failures not stop it from deciding to simply invest their monies in stocks or bonds or themselves (share buybacks)? These decisions are of the highest ......