A Coggle Diagram about Pat Dorsey on Moats
, Network Effects
, Structural Advantages,
, Economic Moat
and Capital Allocator Models with Passionate Managers
Investing is lousy Game. No one gets rich overnight.
and Independent Thinking and Indifference to criticism - example of person with such virtue : Henry Singleton : He thought of ideas and made other people do them. He bought back shares when he considered it cheap and increased the shareholder value. Buffet likes the idea but says " He would not like to enrich group of staying shareholder at the expense of the selling shareholder" Singleton says he does not believe in market time and buying when he thinks the valuation is cheap compared to its value.
), Akre on Investing
- Interest to preserve and grow rich
- Independent thinking
- The common stocks gives the best return of 10%
- This return correlate with the long term return on Owner's Capital
- Return on asset would approximate the ROE over long term given the absence of distribution and constant valuation
- Since constant valuation is not possible concentrate on modest valuation
- Goal to compound the capital at above average ate at a below average level of risk
- Characteristics of business with low risk we like to own are
-- higher return on capital with more growth
- stronger balance sheet and frequently lower valuation
- We use free cash flow Return on Capital which are historically better than average
and 3 legged Stool
- nature of business- why given the business give above average - is the run was long and wide?
), Margin of Saftey
It is buying shares at a lower price than the interinsic value.
, Earning Power is a distinguishing factor which drives the market value of companies.
1.Look at true cash generation rather than superficial earnings.
- It is better to look for companies depending on few key drivers
- Better to look for companies driven by revenue rather than costs.
, Understand the Industry and in which few companies in the industry is the market value is concentrated in.
and Compounding Effect
For example The gift for the chess inventor