Palantir

I don't doubt that Buffett is likely extremely arrogant, you need to be if you want to do what he does. If you do not believe that you are the best capital allocator in the world, why would you continue to be CEO of Berkshire? I think that most extremely successful people are to some degree...a little bit twisted.

Michael Burry?

An (leveraged) operating firm's change in book value is totally different from a fund's performance.....

No, Greenblatt is the authority here. Buffet's only identifiable track record dates back to the 60s.

As Charlie says, "always invert", so instead of "why spinoffs?" your question should be...................actually, I'm not sure where I was going with that.

Hahaha, thanks. That is the difference between Buffett and John Hussman, one has the results, and the other has very reasonable arguments.

I have not dropped any of my points. It is still indisputable that going long AMZN was the right decision ten years ago if you had a investment case for doing so, I used "highly likely" to refer to a more general scenario with AMZN as an example. OTOH, I like that you are slowly coming around to my argument, judging an investment case by the end result. Keep it up.

No, there is absolutely no way to definitively judge the strength of an investment case. Wrong again. If I am invested in, say, Fannie Mae, because I believe that the court will reverse the 2012 Amendment that sweeps away all of their capital -- explain to me how there is "no way to definitively prove" whether I was right or wrong. Why would the actual result of the litigation not "prove out the strength of [the investment case]"? Oh...all this time you spent telling me that using results was the wrong method. But I guess that you're getting around to my view. You realize in these scenarios you're looking at an investment case after the event happened? Markets reflect information that flows into them such as the FNMA court verdict or what TSLA's gross margin will be and that is what drives market returns, they do not simply appear out of thin air. Furthermore all value investors depend on the market recognizing value at some point, and if the market never recognizes the value of your holdings, you will not be a very successful value investor. Frankly, I find your disdain for investing in these names to be pretty amusing, it seems that you think that buying TSLA or AMZN is just throwing your money in a set of random outcomes, and which leads to some random price movements on a screen. I have no interest in correcting this view. Speaking of pigs, my view is, "why argue with a fool when you can bet against him". I'll be doing that.

I don't have time to type up a long essay, it's not a slow weekend for me. No, this is badly mistaken. There is no way to definitively prove the strength of somebody's case for an investment. Please read the bolded part over and over again. Investing has no built-in feedback mechanism, and an investment case is merely an opinion. However, what can be measured is the end result of making the investment. If you make a reasonable case for long AMZN and it goes up 800%, there is a good chance your case is justified. If you make a reasonable case for shorting AMZN, and it goes up 800%, well...hahahahha.

If you use the market price to judge a stock - what are you comparing? Price with price. So what's your analysis? Nothing. Was CYNK a better company at a $10 billion valuation than at $10 million? You don't know if you don't look at the underlying business - you are speculating. Please quit the nitpicking, all Merkhet is trying to explain to you is, if you had bought Amazon for $20 billion, how much cash would roughly have ended up in your bank account after a decade? Probably less than $160 billion. Seen from that perspective (I would say the value perspective) Amazon wasn't a 800% return investment. What the stock did in the meantime is irrelevant for that analysis. Do you really not understand this line of reasoning? Also, if the market is 'right' about Amazon, why did you buy it? Risk-adjusted return would not beat the market .. I'm going point out something to you - the valuation of a firm is not just the cash it has generated in the past, but what it will generate in the future. As for the rest, see my response to merkhet.

I don't see a point in continuing this discussion, but I thought I should follow up on this post as you do not seem to understand the point I made and rather are bent on accusing of saying things like "market is always right", which I did not do. I think you need to remember that the whole point of investing is to make money - if you can do it through value investing, great, growth investing, also great. That's it, there is no other reason to be investing in the markets. And in that vein, if you had a legitimate basis for investing in AMZN, you indisputably made the correct decision. You are free to use whatever methodology you want in valuing AMZN. However, that does not mean that the answer you get is correct, nor does it mean that the market price is wrong. All valuation methodologies are based on assumptions which drive the end result, and are therefore opinions, and educated guesses, not fact. Try to understand this point - this means that you cannot definitively prove that the market is "wrong" and your valuation calculation is "right". There is no feedback mechanism that determines the correct answer. As for the market, I do not believe the market is "always right", and in this case I believe the market is wrong because I think it is undervalued, however, the market has done a FAR better job of understanding AMZN than either you or Warren Buffett. Yes we have spoken about lottery tickets before, however if you can find a way to predict lottery results and profit off those, then your result is not the result of chance. The more subtle point I am trying to make is that investing in AMZN is not investing in a set of truly random outcomes - there is a legitimate investment case for AMZN and people have been making it, and profiting off of it for years. If you do not understand this case, then simply put it into your "too hard" pile, and move on instead of critcizing those investors as "investing in lottery tickets". The burden of proof is always on the investor to show why you believe the market, which is composed of thousands or millions of investors is wrong whether you are making a long case or a short case. This is a pretty poor straw man, but whatever floats your boat.

Try to see the point. You are assuming that your metric of earnings growth is the "correct" metric, whereas the market value is the "wrong" metric. This is something that you have not established - why the market is wrong about AMZN, and now you are presenting it as a fact.

Untrue. On the other hand if you had bought its stock, your actual return would be 800% thoroughly justifying by a wide margin your original long case. An accounting construction like earnings is a very poor measure of your investment.

You said, "The fact that a stock goes up after you decline to buy it doesn't mean your analysis was wrong". Ok, then what shows this analysis is wrong or right? We don't know what Buffett's analysis was so we can never know if it was right or wrong, and even if we did we still might never know. That's the unfortunate reality of investing: we can only observe what has happened, but we can't observe what could have happened. I don't disagree, and I'll point out that I'm not the one who brought up "Bufett vs Palantir". Buffett can do as he pleases, I have no problem with him investing or passing on AMZN.

You said, "The fact that a stock goes up after you decline to buy it doesn't mean your analysis was wrong". Ok, then what shows this analysis is wrong or right?

^ Yeah for sure, I think i-retail will be much bigger, but IMO limited in scope internationally as it is fairly US-centric, although they are investing in India. Not to mention their internet services business has such a huge potential market, from infrastructure to applications. I think 10 years from now, I hope they make 20B in FCF, or owner earnings if you will.

Then pray tell, what makes your analysis right? Is it correct if enough fanboys on an internet forum get excited about it? Given that AMZN has been up 800%+ since Buffett bought the bonds, passing on the equity was indisputably the wrong decision. The fact that you put AMZN in the same group as CYNK tells me all I need to know. As a BRK shareholder, I would have no problems with Buffett buying CRM 10+ years ago.

;) Given that AMZN is up 800% since Buffett passed on it, Buffett has been dead wrong.

I did not know he looked at it. That being said, I mean, do you think Buffett was correct on passing on it?

Bought AMZN

Can we get back to talking about drugs and prostitution?

What do you think will replace it?

If they were joined at the hip, people who were good at Math would almost always be good at English. But people who are good at Math are usually good at Physics, which are indeed joined at the hip.

Again, you are getting tripped up in semantics. Whether or not the value crowd is able to apply the same analysis as the growth crowd is largely irrelevant. They are both, as I stated a few posts ago, trying to lay out less money now than what they would receive in present value from the future cash flows. I know nothing of soccer, so allow me to use American football terminology. It doesn't matter if you have a running game or a passing game. The goal is the same for every single team. This is what Buffett and Munger mean when they say there is no difference between value and growth. Teams that depend on a great passing game don't necessarily excel with the running game and are usually exposed when the passing game is cut off. Just ask Peyton Manning. So it does matter whether you have a passing game or a running game, and being good at one doesn't mean you are good at the other. If you want to learn the investment case for FB, feel free to peruse the FB thread, and search Google, I'm sure you will find many enlightening things. Given that those who believe in that case have done well, your argument is pretty weak. Unless of course you subscribe to the idea that only investing in certain stocks is "legitimate".

I think you are getting confused. Value of a company is of course the PV of cash flows, however the analysis to getting to that is very different for different styles of firms, and those that are good at one style (value) rarely can apply the same analysis to another (growth). In the same way, winning a soccer game is about scoring more goals than the other team, however, there are many diverse strategies of getting there, and usually players that fit one style may not fit another. There is a significant difference in how you evaluate TSLA vs GM. GM's incomes are far more predictable than TSLA, whereas in TSLA's case each of those above metrics are highly uncertain, it is the same reason that they attract different groups of investors. No, there definitely has been a legitimate investment case for owning FB, and people have made it many times, and have been proven correct given how well those that bought it have performed. And no, a lottery ticket can be a great investment if you find a way to raise your odds of winning.