Christopher Begg: High-Quality Investing & Playing the Infinite Game
Talking Billions with Bogumil Baranowski
Navigating the Evolution of Value and Growth Investing
Investing strategies have evolved from traditional value investing, characterized by purchasing assets at a steep discount, to a more nuanced approach that blends both value and growth principles. Value 1.0 focuses on buying undervalued assets, often without growth potential, while Value 2.0 shifts towards acquiring high-quality businesses that generate measurable free cash flow and grow over time. This approach acknowledges the importance of cash flow yield, as it contributes to total returns. Value 3.0 introduces a more complex landscape, where investors must assess the true earnings potential of businesses, sometimes obscured in financial reports. This stage emphasizes understanding long-term business fundamentals and recognizing competitive advantages that may not be immediately apparent in earnings. Successful investing now hinges on the ability to evaluate both the purchase price and the capacity to hold onto quality investments, revealing the importance of patience and knowledge in navigating this intricate investment terrain.
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