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David Plon's avatar

I think a lot of the signal comes from what exactly they’re quoting of Buffett. In this case, something as general as “build a snowball” (and even disregarding Lowenstein’s superior book!) is a red flag. Whereas if a manager explained why they count stock-based comp as real expense by quoting one of Buffett’s letters, I’d be impressed.

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Levi Ramsey's avatar

Graham definitely advocated for management to issue stock if the share price was overvaluing the business. While Buffett definitely has his own Graham-influenced approach, I'm not sure it could be ruled out that Berkshire would institute an ATM if the shares started trading at, say, 3x Warren's estimate of intrinsic value.

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