The validity of the theory is proven by correct prediction of events, and one of the best ways to verify this is to invest. Investing in listed companies allows me to demonstrate the validity of my theory with my own money and gives clients confidence that the methods and recommendations given to them are indeed valid.
As the growth of the company’s long-term value is predicted by the growth of gross profit, which in turn depends on the company’s manager’s ability to continuously innovate profitably, I invest in companies whose gross profit growth exceeds competitors (with the exception of biotechnology, if there is no turnover yet) and whose leader has a very good knowledge of the field and has high ambviersion. Examples of such extraordinary leaders are Jeff Bezos, Arie Belldegrun.
The validity of the extraordinary manager’s theory is confirmed by the significant increase in my return on investment after I began to invest consistently on the basis of this theory. While in the first nine years (2005-2013) the profit of my equity portfolio exceeded the S&P 500 index by only 9%, in the next seven years (2014-2020) the profit exceeded the index almost twice (89%).
Although portfolio earnings growth is not a very accurate indicator for comparison (depending on the addition and withdrawal of money invested in stocks, which I have repeatedly done), it convincingly demonstrates the validity of the extraordinary manager’s theory.