Rethinking Value for Subscription Businesses

In this incredible interview I spoke with legendary investor Bill Nygren, who has beaten the market over a 25 year period by around 200bps. This is an extremely hard and rare feat. In our wide-spanning conversation Bill tells us about everything from his investment process and valuation framework to how to value a cyclical business, the importance of management, investing lessons from Netflix & Meta, as well as what a lot of value investors get wrong. We even had time to talk about his Salesforce and Airbnb postions a bit. We hope you enjoy!

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Show Notes

(0:51) — Bill Nygren's Investment Philosophy (4:15) — Valuation Timeframe (9:22) — Is There a Thing as Fair Value? (12:19) — Investing in Banks (17:30) — Why Haven't We Had a Normal Recession? (18:43) — How to Value a Cyclical Business? (23:24) — How Confident Can You Be on Your Downside? (24:36) — Does the Quality of Management Matter? (26:28) — How Important is ROIC? (28:34) — Should an Investor Buy & Hold Forever? (39:21) — The Role of Talking to Management in Your Investment Process (41:54) — Research Process (44:54) — How to Gain Confidence in Your Research (49:08) — Investing Lessons From Meta & Netflix (1:03:48) — Portfolio Analyst Relationship (1:06:38) — Portfolio Diversification (1:10:06) — Salesforce and the AI Risks (1:13:64) — What to Do About Deferred Revenue in Software Stocks (1:17:26) — Why Bill Owns Airbnb Over Booking Holdings

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Disclaimer

Nothing in this podcast is investment advice nor should be construed as such. Contributors to the podcast may own securities discussed. Furthermore, accounts contributors advise on may also have positions in securities discussed. Please see our full disclaimers here: https://speedwellresearch.com/disclaimer/