Listen to the deep-dive discussion – Why Spreadsheets miss infinite return (20:03 min) “The market makes you overpay for what you can see — and underpay for what it cannot.” — Averaging Up I. Return on Reinvested Earnings Warren Buffett identified the benchmark decades ago. A great business compounds book value at approximately 15%…
Category: Capital Allocation
The Visa Reef – How the World’s Strongest Moat Absorbs Every Threat — and Why It Remains Structurally Undervalued
Listen to the deep-dive discussion – Why Visa is Safer Than Treasury Bonds (19:05 min) I. The Architecture Visa does not lend money. Visa does not hold deposits. Visa does not take credit risk. Visa does not own inventory. Visa does not build factories. Visa does one thing: it operates a network through which…
The A Paramount – When Growth Dissolves Into the Toll
Listen to the deep-dive discussion – Why invisible growth breaks valuation models (27:31 min) “The best business is a royalty on the growth of others, requiring little capital itself.” — Warren Buffett * * * I. The Dissolution In “The Freesurfer,” we established that certain rare businesses ride structural waves at zero cost. The…
The Hierarchy of Moats – A real-time case study in moat fragility
Listen to the deep-dive discussion – The Only Five Perfect Monopolies (17:19 min) “The most important thing is high barriers to entry. If you find a company that is going to be a good company long-term, then you should hold on to it because there’s a persistency of these barriers to entry.” — Chris…
The Big One – When the Double Swell Freesurfer Meets Multiple Expansion
Listen to the deep-dive discussion – When the Best Growth Costs Nothing (19:42 min) “That wave was a wave we didn’t know existed. We hadn’t seen waves like that.” — Laird Hamilton, on the Millennium Wave at Teahupo’o * * * I. When Growth Is Free Every business can be decomposed into two forces….
The Convergence Model
Listen to the deep-dive discussion – How Convergent Businesses Grow for Free. (36:02 min) “When somebody says, ‘Any idiot could run this joint,’ that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.” — Peter Lynch, One Up On Wall Street “In my…
The Physics of Compounding – Why Great Businesses Obey Laws, Not Decisions
Listen to the deep-dive discussion – The Physics of Zero Cost Growth (49:08 min) “The most powerful force in the universe is compound interest.” — Attributed to Einstein * * * The Question Nobody Asks Every investor asks the same question: what should I buy? Few ask the better question: why does it compound? The…
What Chris Hohn’s Portfolio Reveals – About the Hierarchy of Tollbooths
Listen to the deep-dive discussion – Chris Hohn’s 53 Billion Dollar Tollbooth Bet. (44:02 min) “The most important thing is high barriers to entry. If you find a company that is going to be a good company long-term, then you should hold on to it because there’s a persistency of these barriers to entry.” —…
The Double Swell Freesurfer – When Two Waves Converge on the Same Reef
Listen to the deep-dive discussion – The AI and ETF Double Swell. (29:30 min) 1. A Taxonomy of Structural Growth In The Freesurfer, we introduced a formula for the rarest kind of business: one that grows without paying for its own growth. We called it A × B. A is the moat—the proprietary toll…
The Way to the Mountain Guide: When the Portfolio Becomes the Position
Listen to the deep-dive discussion – Stop Climbing When You Reach the Summit (29:42 min.) “When you start to confuse Freddie Mac, Sallie Mae, and Fannie Mae with members of your family, and you remember 2,000 stock symbols but forget the children’s birthdays, there’s a good chance you’ve become too wrapped up in your…