At first glance, Ramsay Health Care is an awful business. Private hospitals are heavily regulated and competitors are usually governments or trusts not working for profit. Doctors wield immense power; the business is capital intensive; and advancing medical technology means operating costs rise relentlessly.
Yet in the eighteen years since it listed at $2.20, Ramsay's shares have increased twenty nine times over to more than $64, to give a total return of 25% a year including dividends. What gives?