In his recent interview with Motherboard, Josh Wolfe discussed why value investing is timeless. Here’s an excerpt from the interview:
Host: I’m really interested in this idea that creating a profitable business is less important to a lot of modern companies and investors than hype and narrative. I wonder how you started to come to see that. How did this happen? How did we get here?
Wolfe: What was that word that you used that starts with a P? Profit? That’s such a weird word. I haven’t heard that in so long.
People are saying that value investing is dead. That Warren Buffett and Charlie Munger are dead. They are not dead, and these ideas are not dead. They are timeless ideas.
They are ideas that say that a business today is the present value of its future cash flows; that a business has a competitive advantage when there’s something structural in its supply, or its brand, or its pricing power, or its ability to have a monopoly on intellectual property or government licensing.
There’s real things that make real businesses. And the value that you provide to the customer is then in the pricing power that you have and in the margins that you make. And contrary to the scarcity of the word today, profits are a great measure of the value that you provide to people.
You can read the entire interview here:
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