Topic: Warren Buffett
6 posts tagged “Warren Buffett”.
The Capital Allocation Hierarchy
Every dollar a business earns faces the same fork: reinvest, acquire, repay debt, pay a dividend, or buy back shares. How management ranks those choices is, over time, what separates great companies from average ones.
Buybacks: Value Creator or Value Destroyer?
Share buybacks are the most misunderstood tool in capital allocation. The test is brutally simple — is the stock below intrinsic value? — yet most buybacks happen at peaks, not troughs.
Value Is Not "Cheap" — It Means Underpriced
Early value investing hunted statistically cheap stocks. Warren Buffett's shift was to pay a fair price for a genuinely good business — because the business, not the discount, drives long-term compounding.
The Invisible Balance Sheet
Accounting was built for factories and inventory. The most valuable assets in modern business — brands, customer relationships, networks — appear nowhere on the balance sheet. Reading those economics is the edge.
DCF Done Right: Bull, Base and Bear
A discounted cash flow model has three inputs that really matter — and most analysts get the last one too optimistic. Running bear, base and bull cases turns a single guess into a margin of safety.
Time Is the Ultimate Multiplier
A business that earns a high return on capital and reinvests it does not just grow — it compounds. Over long horizons, a high-return business held for decades beats a cheap, low-return one held briefly.