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John Huber: Base Hit Investing

The Security Analysis Podcast

NOTE

Focusing on Cash Flow over Tangible Assets

The speaker highlights that in a different time period, buying a company like SEEDS was not about tangible assets or book value, but rather about free cash flow. Even though they paid above the value of tangible assets, it was considered a good deal because of the strong cash flow. Although it was not a 'net net' investment with protective assets, on a cash flow basis, the investment was deemed very cheap. This approach contrasts with buying based on low book value and highlights Buffett's strategy of prioritizing cash flow over tangible assets.

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