Value remains in high-flying tech giants
The speakers argued that Berkshire Hathaway's $10 billion private placement in Alphabet demonstrates that high-performing tech giants can still offer value even after massive run-ups.
The argument
The panel discussed how Google is up 188% over the past year, yet attracted a massive investment from Berkshire, which historically struggled to pattern-match digital moats. They noted that buying a stock that has already doubled or tripled is psychologically difficult but can be fundamentally justified by robust digital moats and cash flows.
The thesis, stress-tested
✓ What validates it
- ✓Alphabet maintaining its search and cloud margins in upcoming quarterly reports
- ✓Further institutional block purchases of mega-cap tech at premium valuations
▸ Risks discussed
- ▸High valuation multiples relative to historical averages
- ▸Potential regulatory or antitrust actions against big tech moats
Hear it yourself
"So, here here's what I want to share with you guys. Peter Bernstein, one of the absolute greatest investment writers of all time, Against the Gods is one of the best books. I cannot recommend it highly enough. He did a, an interview with PBS Frontline. It was a documentary in 1997, and this hit me so hard, like, so so hard when I when I first listened to him say this. So he was talking about the difference in yields between stocks and bonds and the historical relationship. And I'm I'm I think you guys have probably heard me say this like you too, and maybe the audience has heard me reference this."
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