I'm an old-school value investor, by temperament more comfortable among stable and certain industries. So when I wade into the waters of "neo-value" investing—the attempt to apply old-school value concepts to new-wave disruptive technology companies—I usually feel disoriented... ...at first, and need awhile to get my analytical bearings. One simplifying assumption that helps me do so is to assume that no matter how much disruption occurs in a particular industry, it won't change the total amount spent by end-consumers on that industry—it will just...

I was in my late teens when I first read "Barbarians at the Gate," the account of the 1988 landmark leveraged buyout of RJR Nabisco (and the GOAT of mass-market business books in my opinion). I remember thinking then that I wanted to "go long" Ted Forstmann, in the... ...Buffett-thought-experiment sense of wanting to own 10 percent of his future income circa 1988. Forstmann struck me as the lone "good guy" in the book, the principled Jeremiah warning of the excesses of the 1980s junk bond era who would eventually be vindicated. I wasn't...

We've discussed before, in this feed and in the main PIB publication, the concept of "neo-value investing," defined as "the effort to apply the principles of value investing to newer, faster-growing, often tech companies." And when I speak of the... ..."principles of value investing," I mean things like a long-term time horizon, a very strong emphasis on the safety and certainty of a forecasted outcome, and upside expectations that are ambitious, but not at the expense of safety and certainty. Now then, it seems to me...

I've long felt that the true foundation of Buffettian value investing is not "value" (whatever that means) or "cheapness." The true foundation of Buffettian value investing is the search for handicapping certainty in equity investing—that's how Buffett built his fortune. But... ...when the time came for Buffett to gift his fortune to the Gates Foundation, he explicitly renounced the search for handicapping certainty as inappropriate for philanthropic bets. Philanthropy is supposed to be about tackling difficult problems, he reasoned, so you have to...

Real estate alpha thought question: Consider all the NYC office buildings mentioned in this article—10 Hudson Yards, Time Warner Center, Chelsea Market, 245 Park, 787 Seventh, Citigroup HQ, and the PaineWebber Building...: wsj.com/articles/warne… Now ask yourself: At a given, constant initial cap rate—say 6%—which of these buildings would you have most wanted to buy from the initial developer and then hold forever? Show your work! More on real estate alpha here: privateinvestmentbrief.com/blog/alpha-in-…

I've always had a vague and idle suspicion that the "real" reason Berkshire Hathaway never repurchased its own stock during the company's 1965-1998 "glory years" was that Buffett thought he could do better retaining and investing Berkshire's cash. In other words, while... ...Berkshire's stock may have been undervalued, Buffett believed other things were more undervalued. Now that Berkshire is buying back stock, we can infer that he no longer believes that. But is it also possible to calculate an indifference point? In other words, what expected...

Time for a speculative hypothesis......I wrestle with my background as a Buffett-worshipping value investor on the one hand, and the seductions of the "neo-value investing" movement on the other. By "neo-value investing" I mean the attempt to invest in modern tech companies... ...using the theology and logic of Buffett value investing. "2004-vintage Amazon is very young, and not profitable on a GAAP basis, but it's growing like crazy and building an enormous moat so it's actually a value investment" is probably the iconic neo-value investing example.

As a rule, when a newspaper article starts with "A difficult debate is raging in the halls of Company X..." and two sentences later the "debate" turns out to be a dumb thing to be fighting about, then usually something else is going on. As marriage counselors, know, fights are... ...never really about what they're supposed to be about. That's what seems to be going on at Netflix. Officially, they're debating internally whether to "trust the algorithm" or override it in order to keep Jane Fonda et. al. happy: wsj.com/articles/at-ne…

The world of condominium developers and the (very private) equity investors who finance them is a murky one. But I tend to think that some condo developers are better "alpha generators" for their investors than others. (More on real estate alpha here: privateinvestmentbrief.com/blog/alpha-in-…).... One potential source of condo real estate alpha, it seems to me, is demoographic. If you could somehow segregate the condo-buying market to isolate those buyers who a) are willing to pay a lot for a new development condo and b) can be relied upon to do so, irrespective of...