Originally Posted by
SailorRob
Of course there are many explanations that I could pontificate at length about, the point is that none of them have anything to do with the future cash flows of the business discounted to today unless your discount rate has risen a lot (as most peoples have).
I rarely disagree with Munger but today we have instant ability to buy and sell ay security in a second in the pocket of billions of people, we have social media, we have ESG, we have Jim Cramer and CNBC, we have high frequency trading, we have way more 'products' we have a much shorter investing time frame average, we have idiocy in spades, we have huge concentration in the markets, I could go on and on...
So all of this creates massive opportunity, not less.
I could not articulate the Bear case really when I filled up at 39c - I could see the worry with Covid ripping through the homes etc but I couldn't see how it would change the value that much.
I also would not and did not pay $1.60 as I could see that it wasn't expensive but no way did I see any massive value or margin of safety.
Mav himself pointed out one of the reasons, it's all about this year and what will produce returns now. Nobody can see out into the future.
If you're talking about why this company will rerate this year, I have no idea... and that's all most people care about.
The bear case is they will not be able to earn an appropriate return on assets, but even low single digits is fine by me.
Why can these amazing computer models you speak of just simply beat the market return?????
If it's such as serious business then why can I beat 98 out of 100 pro managers in NZ? Just by buying an ETF????
Why has Berkshire been undervalued by nearly 50% for decade after decade?