Somewhat unique business, very uniqe management, page-34

The wonderful world of investment! Perhaps we should have this discussion under the tag of "Investment Philosophy", or something.

To the topic of RMD. What can I say? If these things could be determined with mathematical precision then I guess you and I could be robots, we would have no interest in what the other had to say, and in fact, we wouldn't have an opinion, as opinions would be redundant.

ARB is a simple metal bashing business. Yes. That's one thing that appeals to me. It gives me a sense of certainty. I figure, no matter where vehicles head, electric powered, driverless etc etc - humans will not fundamentally change. As far into the future as I can see, people will still drink wine (terrible as a business though), and a good many will still want to put accessories on bush bashing machines. Every dollar that ARB spends on marketing and R&D reinforces its moat very tangibly. The moat is tailored to the threat, pretty well, I believe.

When it comes to technology, every dollar spent on R&D, no matter how big you get, cannot easily fend off every innovator out there coming up with all sorts of ideas in all sorts of places. Too many back swans, I'd say. The moat is under constant threat. In fact, how do you build a moat tailored to a threat, when you don't know what the threat is?

Take Google. Is there a bigger R&D budget? But when your moat is "better innovation than anyone else", I think you're up against it. But sure, Google is not a perfect analogy, perhaps not even a good one.

When a business is bought on a high multiple, it implies an expectation of longevity. 40% of the value, or more, may be contingent on earnings that will not start materializing for 40 years! As you say, forecasting is for mugs. But this is the dilemma. If I can't forecast, I want a future that is not too different from the past (or so I hope).

But you're right, I'm making a judgement, perhaps a not very well substantiated one, about what is more or less predictable. The reality is, all is subject to black swans, and I cannot choose to avoid them. If I could make that choice, they wouldn't be black swans. Ultimately, we can rationalize until the cows come home, but we mere mortals are just here groping in the dark, and ultimately we make choices on the basis of what feels better.