In exchanging e-mails with some friends about this I sent the below vision I had recently of a Valuesaur museum to be located in the vacant offices of hedge fund central in NYC.
And over here we find the most intact fossil of the Valuesaurus Rex, who went extinct during the Great Pandemic in the late stages of the Softwareeatstheworld Era. This fossil is particularly significant as extraordinary rare physical certificates of real estate and insurance companies were found preserved in amber in the same cave.
Let’s move onto the Buffettosaurus.
when this IPO’d I read the S-1 and talked to a lot of my friends with the bikes. My gut was the TAM was lower than projected because of cost but the pushback I received on the value proposition relative to alternatives led me to conclude this had more potential than my gut reaction. Of course any kind of quantitative attempt at valuing the earnings as a sum of the subscription revenue at a very generous multiple and the 30% margin durable good that doesn’t need to be replaced for a long time at a low multiple led me to conclude it was pricing in pretty wide adoption, but I came away with the view that wide adoption was definitely a node in the probability tree and a higher probability than most would assume.
my wife wants a Soulcycle bike because "they don't ride to the beat" at Peloton...but Soulcycle can't seem to get their act together/manufacture and distribute. given our household Soulcycle expenditures the IRR on a Peloton purchase would be high.
The problem with “value investing” is that the Ben Graham style worked well mainly in the immediate decades after the Depression. And it probably works well for short periods (like when the entire market takes a big hit in a crisis). After that, you needed to wade into the more murky Munger waters where harder to pin things like behavioral aspects of consumers become much more important.
I agree and only own a couple of net nets (including one recently purchased at 1/3 of cash!).
Despite my incessant real estate posts, real estate comprises 15%-20% of my parents diversified portfolio which owns un-Graham stuff like MSFT/GOOG/AAPL/FB/CRM/700HK via Prosus almost PINS but then she ran away from me, but is anchored with BRK/B as the largest position. I am personally more aggressively/heavily in real estate and have a less tech
I think pure Graham stuff is really hard to do for a lot of reasons and am not a pure Graham guy by any means; he would think my levered CRE investments are going to zero because of what happened to such things in the Depression.
But when you see things like SHOP at $85 billion or PTON, you nevertheless feel like a dinosaur. And let's not act like I'm being super forward thinking with my tech stocks either. I bought all those well after they became what they are.
Seeing where the puck is going at these sales multiples (SHOP on its sales, PTON on its subscriptions, or TSLA with its seeming fraudi-ness and stock levitation) is freaking hard. I mostly just look on with a mix of admiration, disgust, and confusion.
