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💰Unpacking the Drivers of Value Creation
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Hey Reader, Did you know that the foundation of modern valuation can be traced back to 1938? In his groundbreaking book, The Theory of Investment Value, John Burr Williams introduced the concept that the true value of an asset lies in the present value of its future cash flows, discounted at an appropriate rate. In today's issue:
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What You'll Learn:
Connect, learn, and grow with Value Spotlight. 💎NUGGETS My Favorite Finds How do we determine what drives returns for investments? Leandro breaks down the drivers of value. Warren Buffett's thoughts on Berkshire Hathaway's valuation. Intriguing take. Geoff Gannon breaks down why free cash flow isn't everything. Valuation Multiples: What they Miss, Why they Differ, and the Link to Fundamentals by Michael Mauboussin. If you know, you know. Q&A with Mohnish Pabriai at Microsoft. Great talk with some interesting takeaways. Chris Bloomstran's Semper Augustus Client Letter: Worth the read for the Berkshire breakdown alone. Good weekend read. 🔍Question of the Week
📖Knowledge Tidbits-
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Unlock the mysteries of the stock market with us! We break down complex topics into simple, easy-to-understand language. Join over 21,000 readers, including professionals from Visa, Wells Fargo, and Moody's, who receive our insights every Tuesday.
Hey Reader,Did you know, when asked, Warren Buffett has always felt like his purchase of Berkshire Hathaway in 1965 was his worst investment. In today's issue: Links to the 2025 Berkshire Hathaway annual meeting Breakdown of the big news from the meeting Resources to learn more about Buffett and Berkshire Hathaway Much more..... 💸Sponsored by: Value Spotlight Investing is hard. Trying to pick individual stocks takes time and effort. But what if you could find someone to do the work for you?...
Hey Reader,Did you know Chuck Akre coined the term "compounding machines" to describe businesses that can reinvest their earnings at high rates of return over long periods. He prioritizes companies with durable competitive advantages like Visa, Mastercard, and American Tower. In today's issue: How to analyze a balance sheet < 2 minutes Breakdown of the Health Care Industry The ups and downs of buying the dip Much more. 💸Sponsored by: Finchat.io FinChat only runs two sales per year. One on...
Hey Reader,One of my favorite Charlie Munger quotes and it still resonates: Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you're not going to make much different than a 6% return -- even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive-looking price,...