CSL has more upside..., page-22

I think CSL will keep growing in the medium to long term and I'm excited to see how the distribution centres in China play out.

Having said that, never forget the (supposed) story of the man who invented chess in India. The King at the time was so impressed with the game that he told the inventor he could have any reward he wanted. The inventor said he wanted one grain of rice, doubled for each of the 64 squares of the chessboard. Thinking the inventor was modest, the King granted it right away. Little did the King know that 2⁶⁴ = 1.8446744*10¹⁹, more than all the grains of rice in the world.

It's not out of line to not want to buy a company based on a valuation at $120bn, priced at 43x earnings and 15.8x price to book. To justify this valuation, CSL probably needs high double digit percentage growth per year for the foreseeable future. But rapid growth isn't sustainable forever, and I'm very happy having bought in at a much lower price.

The trend is your friend, until it isn't.