Kevin Duffy on value investing

Value is subjective and all investing is taking a stab in the dark as to what consumers (and investors) will value in the future.  Honestly, all investing and speculating is “value investing.”  Look at how the “value investor” has evolved since Benjamin Graham from searching for cigarette butts to focusing on high quality businesses with durable competitive advantages.  I suppose this might even change over the next 100 years.  Those who understand this adapt and thrive.  The traditional value investor risks missing opportunities due to a rearview mirror/present profitability bias.  Amazon.com in the mid-2000s was a classic example.  It was clear that a) e-commerce would take significant share from traditional retailers over time and b) Amazon was the clear winner.  Yet I passed because it looked “pricey” at 75 x current earnings.  Stupid!!!  Biggest, and dumbest, mistake of my career.

~ Kevin Duffy, February 23, 2021