Thus our first lesson: businesses logically are worth far more than net tangible assets when they can be expected to produce earnings on such assets considerably in excess of market rates of return. The capitalized value of this excess return is economic Goodwill. — Warren Buffett, Berkshire Hathaway shareholder letter, 1983 Download the Slides…
Category: Inflation
The Gap, the Gift, and the Guarantee – What You Actually Buy When You Buy a Great Business
“Price is what you pay. Value is what you get.” — Warren Buffett Listen to the deep-dive discussion – The Gap the Gift and the Guarantee Download the Slide Deck (PDF): The_Financial_Architecture I. The Floor The traditional approach to valuation projects growth—estimates future cash flows, discounts them at a rate that blends the risk-free…
$190 Billion to Grow – What the AI Race Reveals About the Cost of the B
“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.” — Warren Buffett Listen to the deep-dive discussion – Why Alphabet dilutes shareholders for AI Download the Slide Deck (PDF) : The_Growth_Ledger_Averagingup I. The Headline On June 1st,…
Three Layers, Zero Cost – The Geometry of Compounding
“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” — Archimedes, 3rd century BC Listen to the deep-dive discussion – How Freesurfers Multiply Profits For Free Download the Slide Deck (PDF): Geometric_Compounding_AveragingUp I. What Hohn Sees In a rare interview, Chris Hohn—TCI…
Cheap Money Hides Impurity – Why Rising Yields Reveal the Gradient
“Only when the tide goes out do you discover who’s been swimming naked.” — Warren Buffett Listen to the deep-dive discussion – Cheap Money Hides Impurity (20:11 min) Download the Slide Deck (PDF) The_Yield_Gradient I. The Tide Goes Out The 30-year U.S. Treasury yield has reached 5.19%—its highest level in nearly two decades. The last…