Earlier this year at the Daily Journal Annual Meeting, Charles Munger explained why old school valuation methods will never die. Here’s an excerpt from the meeting:
Munger: They’ll never die. You can’t… The idea of getting more value than you pay for, that’s what investment is if you want to be successful you have to get more value than you pay for. And so it’s never going to be obsolete.
Now you can get a whole body of people that don’t even know what they’re buying, they just quote quotations on a ticker. I don’t think it’s helpful to have… Think of the past crazy booms and how they worked out, the South Seas bubble, the bubble in the late 20s so on and so on.
We’ve had this since the dawn of capitalism, we’ve had crazy bubbles.
You can watch the entire discussion here:
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