First-Gen Riches, Third-Gen Bust? Investing in Google’s Future

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During their latest episode of the VALUE: After Hours Podcast, Taylor, Carlisle, and Brewster discussed First-Gen Riches, Third-Gen Bust? Investing in Google’s Future. Here’s an excerpt from the episode:

Tobias: All right, here’s a good question riffing on Buffett’s chat. “What do you guys think are some of the few companies that are going to be better businesses and earning more 5 years from now with 90% confidence?” That’s from Tyler Pharris. They’re the fourth higher producer. Tyler Pharris is responsible for 90% of this episode. Thanks, Tyler.

Jake: Yeah, it’s interesting. That came from, I think, Todd Combs talking about what him and Buffett talk about on Saturday afternoons. They’re basically mostly just talking about businesses that fit that criteria. Is that a correct–?

Bill: Yeah. Do we have a price on this? Are we limited to the 15 times earnings thing?

Jake: [laughs] Yeah. That makes it a little harder, doesn’t it?

Bill: Yeah.

Tobias: There wasn’t a limit on this. So, I guess you can swing away.

Bill: Anything.

Tobias: What about Mag 7?

Bill: I don’t think I am going against it.

Jake: Yeah.

Tobias: It was true. All of the big growthy companies from 2000, they all compounded away from 2000, 2015. Price didn’t go anywhere, but the businesses certainly got bigger over that period.

Bill: This isn’t a unique thought given where it trades. But I think the one that would make me the most nervous is Google. I just don’t know–

Jake: AI related search.

Bill: Yeah. And I don’t even know that it’s like AI. It’s just like, they’ve made so much money for so long that I just wonder if something were to compete with their economics, do they even have the muscle to learn how to pivot? It’s like first generation makes it, second generation spends it, third generations got nothing, like, what generation are we in?

Tobias: Three generations.

Jake: [laughs]

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