I’m glad somebody else brought up the example of companies that don’t do this well. I was reflecting on the Google leaders who do not seem to have the skill of capital allocation. They struck absolute gold with search ads, and somehow took one of the most profitable businesses of all time and did not manage to build a single other successful business out of it. You can say they bought YouTube and Gmail and are building Google Cloud, but their track record is quite poor at assessing other businesses. Can you imagine what Buffett or Munger could have done with the profits from search ads?
I’ve also been reflecting on how this applies to personal finances, the skill of saving and reinvesting in other possibilities that will generate cash. I haven’t figured that one out.