Return on Equity Quotes

Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.

One of the best investors around, Joel Greenblatt, has written a popular, charming and funny book about investing in great companies at low P/E multiples. To simplify an already simple book, great companies are generally measured as companies that can generate lots of profit without requiring a lot of capital. This means that they have high ROEs.

You will not see, in my career, the kind of returns this industry had in 2005 and 2006 for a very simple reason - the banks were undercapitalized, and returns are a function of earnings and capital.

What are we focused on? Return on equity. We don't need these great big tier one assets. I'm very happy with getting tier two, tier three assets; that's what Glencore has been good at.

When the opportunities come, we may not want to buy another nickel asset, but if something comes cheap enough, we're all about return on equity.

Now the Japanese companies are more focused on that. To have two independent directors - I think it's good to have outside people look at you and think of what you could be doing better. Those are voluntary, but most of the companies told me they're going to do it. And I think it's good for them to say our returns on equity, for example, should be higher. Also, I think some could be more ambitious.

In order to access private capital, you have to provide competitive return on investment. In order to give competitive returns to investors, you've got to operate on a profitable basis and be thinking of yourself as a business.

Focus on return on equity, not earnings per share.