By
Borsgade
In a recent interview with Barron’s, value investor Christopher Davis delves into two critical investment considerations: identifying the right businesses to own and determining the appropriate price to pay for them.
Christopher emphasizes viewing investments as business acquisitions rather than mere stock trades. He underscores the need to assess liabilities, undervalued assets, and long-term durability instead of focusing on short-term gains. Comparing today’s market to past dynamics, Davis highlights the shift from an era of “free money” to one of higher costs and technological disruptions, warning against complacency driven by unrealistic economic policies and inflated valuations.
He advocates for targeting resilient, undervalued businesses with sustainable competitive advantages—companies capable of navigating economic changes and delivering steady returns in an increasingly volatile and fragmented market.
We own businesses that have these qualities of durability, resiliency, sustainable competitive advantage, and decent returns on equity that we think are sustainable over long periods of time. We’re not so worried about if they’re lumpy; we’re worried about whether they’re durable.
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