What are the Four Cornerstones of Value?

1)Companies create value by investing capital from investors to generate future cash flows at a rate of return exceeding the cost of that capital. 2)Value is created for shareholders when a company generates higher cash flows, not by rearranging claims on those cash flows.   3)A company’s performance in the stock market is given by changes in the stock market expectations not just the company’s actual performance, this is sometimes called the expectation treadmill. 4)The value of a business depends on who is managing it and what strategy they pursue, “Best Managers.”