Whether management loves money or loves the business
Management that unfailingly thinks and behaves like an owner of the business and has the courage and candor to discuss failures openly in reports to shareholders.
superb businesses
Problems with the most popular indicator of superb companies
From its growing operating cash flow, it is able to fund growing capital spending and also fund growing R&D expenditures. Of note, it seems to be able to maintain and even improve its operating margins. It is easily able to fund the capex needed to maintain it long-term competitive position in its various markets. It is also easily able to fund the capex it chooses to make to grow the company and fund healthy R&D expenditures.
Value investing in the age of the Magnificent Seven, networks, intangibles, AI and all that
A high ratio of price to book value, a high price-earnings ratio, and a low dividend yield – are in no way inconsistent with a ‘value’ purchase.
The investment styles of three great investors: Keynes, Templeton and Buffett
A careful selection of a few investments (or a few types of investment) having regard to their cheapness in relation to their probable actual and potential intrinsic value over a period of years ahead and in relation to alternative investments at the time.
Not everything that counts can be counted
It is difficult to accept uncertainty. It is tempting to try and escape it by kidding ourselves and each other, but that is liable to land us in greater difficulties.
Investing in businesses vs investing in stocks
When investing, we view ourselves as business analysts – not as market analysts, not as macroeconomic analysts, and not even as security analysts
Why stocks outperform all other asset classes
A major reason is that businesses retain earnings, with these going on to generate still more earnings–and dividends, too
Stocks – avoid stepping in the bad stuff
Unless management holds the major part of their family net worth in shares of the company there is a serious potential agency problem
The tenets of companies Buffett invests in
There won’t be many seven footers out there. The vast majority of stocks don’t measure up and can be ignored.
Making sense of free cash flow numbers
To understand how a company can lose $256 million in reported earnings in 2020 and yet show FCF that year of $491 million you need to read and understand the company’s cash flow statement.
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