Talks at Google
Tom Gayner
CIO Markel Corporation
Tom described his journey as a Value Investor
Initially he was spotting stocks based on quants. As this did not work, the next step was to look for companies that created value. This he illustrates is like watching a movie unfolding instead of looking at a still photograph.
He came up with a 4 point view to look for while investing
1) Looked for profitable business which gave good return on capital without using much leverage. Needs to see a demonstrated record of profitability.
2) Look at mgmt intensely. Look for high integrity and talent.
3) What is the reinvestment dynamics of the business. How scalable is the business ?
4) Price. Most of the people look at price first and then look if it is a good investment to make. There are 2 mistakes ppl make here. a)wrong valuation and end up over paying b) Not buying a stock thinking it is over valued and the stock keeps on going up.
Generally speaking high quality promoters do not use high leverage
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