The McKinsey Podcast A conversation about valuation
41 snips
Jul 31, 2025 
Tim Koller, a McKinsey Partner and coauthor of the seminal guide on corporate finance, discusses the evolution of business valuation over 35 years. He emphasizes the importance of long-term strategies in investing, drawing on Warren Buffett's legacy and success. Koller explores how cognitive biases can skew executive decisions and suggests AI as a tool for overcoming these pitfalls. Additionally, he highlights the challenges of geopolitical risks and the need for ethical considerations in company valuations. Tune in for invaluable insights on sustainable value creation!
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Buffett's Long-Term Investment Insight
- Warren Buffett's success comes from taking a very long-term investment view based on facts and cash flow potential.
- Companies that adopt long-term thinking tend to outperform those trapped in short-term cost-cutting cycles.
Focus Beyond Short-Term Earnings
- Avoid focusing solely on short-term earnings when making strategic decisions as many investors prioritize long-term value.
- Have the courage to emphasize growth and innovation over cutting costs to please noisy short-term investors.
Invest Long-Term and Communicate Clearly
- Make investments aligned with the timeframe of their returns, even during recessions, to avoid falling behind competitors.
- Identify which sustainability or inflation issues truly affect your company and communicate your specific strategies effectively to investors.
