Innovation and Value in Capital Allocation

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This chapter explores the importance of innovation and value in capital allocation, emphasizing the need for continuous innovation to stay ahead of competition. It discusses the distinction between companies that innovate and provide better products/services and those that exploit customers. The chapter also highlights the significance of analyzing a business's R&D and marketing history to ensure wise spending and value generation.

Kyle Grieve chats with Adam Seessel about the importance of R&D spend to a business's competitive advantage, why value investors should embrace tech as a massive creator of value, how following Benjamin Graham to the letter is causing some investors to hold onto outdated ways of thinking, why studying network effects is so important in the digital age, the importance of buying quality businesses over cheap businesses, using Adam’s BMP method on one of his newest acquisition Texas Instruments, and a whole lot more!

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

03:54 - Why we should prioritize quality businesses over cheap ones.

02:51 - The basics of the BMP method.

10:38 - The importance of R&D spend for competitive advantage.

29:44 - Why value investors should embrace tech for value creation.

31:43 - Questioning the strict adherence to Benjamin Graham's principles.

42:46 - The significance of studying network effects in the digital age.

46:50 - Applying the BMP method to Texas Instruments.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

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