Successful investing should be based on purchasing assets yielding a good long term return at the right price

I was reading The Outsiders: Eight Unconventional CEOs and there was this portion where it highlights the CEO of Washington’s posts mantra for acquisitions is that it must meet a 11% cash yield over 10 years.

I thought that is rather interesting seeing that many are asking what is the right price to buy stocks.

The most important skill for a CEO is capital allocation, and for the investor it is also the same skill.

Yield versus business cycles and risks

Many a times, the evaluation is done for an asset next year yield to be X%, which would have met your required return (dream return)

One needs to look more into the return per unit risk.

By that if your asset(purchase) yields 8% when their business is doing best, you failed ...