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: Sizing
Why Every Compounder Reaches a Crossroads – What Success Does to a Business
If something cannot go on forever, it will stop. — Herbert Stein, former Chairman, U.S. Council of Economic Advisers Download the Slides Deck: The_Compounder_Crossroads Listen to the deep-dive discussion – The internal physics of business compounding I. The Same Label on Different Businesses Coca-Cola and PepsiCo sell drinks to the same world, ride…
The Stock You Can Sleep On: The Toll Whose Growth Is Free — and Asks No Decision
“I have to be able to sleep at night. It has to be sufficiently obvious… because what kills you as an investor is permanent loss of capital.” — Sir Chris Hohn, TCI Fund Management Download the Slides Deck: THE_FREESURFER Listen to the deep-dive discussion –How Freesurfer stocks capture free growth I. The Investor…
The Light Toll Builds Its Railroad: Microsoft’s Bet on A Absorbing Its B
We have to manage a capital-intensive business, but using all of the levers that software gives us… those are all the things that I think will generate great ROIC — and this is probably unique. — Satya Nadella, March 2026 Download the Slides Deck: The__190_Billion_Absorption Listen to the deep-dive discussion – Microsoft’s 190 Billion…
Why Berkshire Is Right About Google – The Alphabet Reinvestment Thesis
“I feel like a horse’s ass for not identifying Google. We screwed up.” — Charlie Munger Listen to the deep-dive discussion – Why Berkshire Hathaway Bet on Alphabet AI Download the Slide Deck (PDF) The_Alphabet_Architecture I. The Decision Worth Defending When Berkshire Hathaway committed $10 billion to Alphabet at roughly $350 per share,…
Coca-Cola vs Moody’s – What Buffett’s Portfolio Reveals
Listen to the deep-dive discussion – Why Moody’s beats the Coca-Cola moat (19:37 min) “We lived in a torrent of money, and we were constantly deploying it.” — Charlie Munger, Berkshire Hathaway Annual Meeting, 2016 What if the torrent deployed itself? I. Two Holdings, One Portfolio Warren Buffett has held Coca-Cola since 1988 and…
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 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…