Seems to me that Warren Buffett minimize his risk by buying cashing businesses at a low that cost relative to the intrinsic value. Thar way the market didn’t need to catch up to his assessment for his investment to pay off - He won no matter what so long as his analysis was sound. This strategy seems far riskier though as a value investor because you’re really betting on the market catching up to your intrinsic assessment. What’s your framework for squaring that? I have no knowledge of your firms AUM but maybe you guys just have sufficient “at bats” for the strategy to work?
this form of value investing has been nicely covered by david einhorn the past few years, assuming no multiple expansion for +FCF companies with minor debt load. growth traps filtered out.
Einhorns approach is very cool! It makes me less antsy as a value investor though since he extensively publicizes his findings, and simply has to trust that enough owners of the stock will find him sufficiently credible to sell and put downward pressure on the price. Doesn’t seem quite as risky.
Excellent !
Thank you for the kind words Vasanth
Seems to me that Warren Buffett minimize his risk by buying cashing businesses at a low that cost relative to the intrinsic value. Thar way the market didn’t need to catch up to his assessment for his investment to pay off - He won no matter what so long as his analysis was sound. This strategy seems far riskier though as a value investor because you’re really betting on the market catching up to your intrinsic assessment. What’s your framework for squaring that? I have no knowledge of your firms AUM but maybe you guys just have sufficient “at bats” for the strategy to work?
this form of value investing has been nicely covered by david einhorn the past few years, assuming no multiple expansion for +FCF companies with minor debt load. growth traps filtered out.
Einhorns approach is very cool! It makes me less antsy as a value investor though since he extensively publicizes his findings, and simply has to trust that enough owners of the stock will find him sufficiently credible to sell and put downward pressure on the price. Doesn’t seem quite as risky.