Core Insights - The long-term return of a stock is closely tied to the underlying business's performance, with a business earning 6% on capital over 40 years yielding similar returns for investors, regardless of initial purchase price [1] - A business that earns 18% on capital over 20 to 30 years can still provide good returns even if purchased at a high price [1] - The impact of taxes on investment returns is significant, with a one-time tax at the end of a 30-year investment period resulting in a 13.3% annual return, compared to a 9.75% annual return when taxes are paid annually [1] Tax Implications - The difference in tax treatment can lead to a substantial variation in long-term investment returns, highlighting the importance of tax strategies in investment planning [1] - Holding investments in great companies for extended periods can provide a significant advantage due to the way income taxes are applied [1]