The ancient Athenians had a word for it. They called it hubris. The dangerous belief that success was permanent, that the rules applied to everyone else, and that borrowed time was the same thing as earned time. Twenty five centuries later, in the spring of 2010, the modern Greeks discovered that the word still carried […]
Why Every Value Investor Needs to Study the Fall of Athens Read More »
There is a strange little corner of economics that almost nobody talks about at dinner parties, and for good reason. It involves dead Irish peasants, a Scottish statistician with an unfortunate mustache, and a curve on a graph that refuses to behave. It is called the Giffen good, and if you are a value investor,
Why Value Investors Should Study the Potato Famine Read More »
There is a moment in every market cycle when someone who spent forty hours modeling a company’s free cash flow watches that company get outperformed by a stock chosen because its ticker symbol sounds funny. That moment is not an accident. It is the collision point between two financial subcultures that could not disagree more
Deep Due Diligence vs. Diamond Hands: When the Spreadsheet Meets the Meme Read More »
There is a strange new ritual in modern investing. A person finds a company they like, builds a model, writes up their reasoning, and then, instead of quietly buying shares and going about their life, they post the whole thing on Twitter. Sometimes it is a thread with twenty posts. Sometimes it is a screenshot
There is a specific kind of person who gets excited about a stock trading below its book value. There is another specific kind of person who gets excited about a triplex in a neighborhood nobody wants to drive through yet. These two people rarely end up at the same dinner party. When they do, they
Cheap Stocks vs. Cheap Buildings: Value Investing Meets Real Estate Read More »
There is a question that value investors ask before they buy anything. It is the oldest question in finance, and it sounds almost embarrassingly simple. What is this thing actually worth? Not what someone will pay for it tomorrow. Not what the chart suggests. Not what the crowd is chanting. What is the underlying business
Imagine a quiet library. A man in reading glasses is halfway through a two hundred page annual report, circling footnotes about inventory accounting. He has owned this stock for three years. He bought it because nobody wanted it, which to him was the entire point. The price is low, the business is boring, and the
There is a certain kind of argument that goes on forever because the two sides are not actually disagreeing. They are speaking different languages and pretending the other side is being stupid on purpose. The fight between value investors and crypto believers is exactly this. It looks like a debate about returns, or technology, or
Value Investors Need Cash Flows. Crypto Does Not Have Them. That Is the Whole Argument Read More »
Imagine trying to meditate inside a nightclub. That is roughly what it feels like to practice value investing while scrolling through financial social media. The two activities are not just different. They are actively working against each other, like trying to read poetry during a fire drill. This is not a small complaint about distraction.
Why Value Investing and Financial Social Media Are Fundamentally Incompatible Read More »
There is a strange kind of comedy in watching two people who both call themselves investors share absolutely nothing about what that word means. One of them has not made a trade in eleven months and considers this normal. The other has made eleven trades before lunch and considers this slow. They use the same
Years of Patience vs. Seconds of Execution: Value Investing vs. Day Trading Read More »