One of the best litmus tests for the long-term success of a company is how well it deals with a downturn. Get it right, and the business emerges stronger. Get it wrong, and any existing problems just get worse.
It’s a stock market rule of thumb that big acquisitions tend to destroy shareholder value. Spin-offs, on the other hand, have the reassuring habit of being more likely to create it.
A successful long-term investing strategy has been to buy and hold the shares of dominant, growing companies. These are rare beasts that can meet their customers’ needs better than anyone else and keep it that way.