The Ledger, every show

“This assumption that you get paid an illiquidity premium for anything that happens to be illiquid is I think dangerous. I think it is going to cause you not to be focused on the question of, all right, if I think this is about operational excellence, why do I …”

“There is very, very little volatility to the underlying fair value. It's about one percent a year. And yet the market has a volatility of 17. And that's a mismatch that says there must be some predictability to the market”

“When we are analyzing these companies, we realize it's not just that we don't care about their book value anymore, but even their stated earnings turn out to be a lousy test of whether this is a good business model.”

“Again, in the US, the value spread is significantly wider than normal, and that probably means value deserves to win over the next five to 10 years.”

“I think one of the things we have seen in the, in some of the trials of what's gone on with the Vision Fund is this basic idea that, well, we can determine who is going to be the winner here by throwing a ton of money at one of the competitors. And assuming th…”

“Productivity growth has been net negative. We are less productive making stuff than we were in 2011.”

“In 1999, we were disinvited from speaking to their investment committee on the grounds that their committee chairman said that Jeremy Grantham was both dangerously persuasive and totally wrong.”

“Google has been able to grow extraordinarily fast by taking share from every other kind of advertising that has happened. The underlying fundamental truth that advertising grows with GDP has not changed, and as their share of advertising gets bigger and bigger…”

“But if you look at Europe, if you look at Japan, if you look at the emerging worlds, the spreads are both wider, and the underlying economic justification for them is a lot more tenuous.”

“If you are a quant, your favorite tool is the back test. And it has now been 12 years that value has underperformed. You are much less likely to come up with a quantitative stock selection technique that is predominantly value, because if you look back, you sa…”

“The two ways you can lose value in equities from a long-term perspective Is if an event causes a long-term decrease in the return on capital, or if an event causes you as a shareholder to be significantly diluted.”

“In the first stage of bear markets, everything tends to go down the same, and if anything helps, it's quality. In the second phase, valuation tends to matter. That doesn't mean value stocks always outperform in the second phase. It is the stuff that has gotten…”

“The way to have a simple way of determining, is this a fair price or not? It doesn't matter what you paid. It doesn't matter what you will pay tomorrow. It is, what is the replacement cost of this thing? And the replacement cost should drive price.”

“The great strength of quantitative investing is if you have a theory about how the world should work, you can vary You can efficiently express that across kind of a wide view of assets. You can test it across a long run of history. The danger you always face i…”

“2000 to 2002 was a wonderful period for value. The similarity to the 1994 to 1999 period is this has been another dreadful period for value as a strategy. We see that kind of on a individual stock level. It's also been a lousy period for valuation driven inves…”

“We don't see that level of disgust with the idea of value today that we did back then.”

“There is no question the gap between the biggest companies and everybody else in their industries, the gap in profitability has widened very significantly, and that widening has been much more pronounced in the U.S. Than it has been elsewhere.”

“Equities are in principle an exceptionally long duration asset. Relative to bonds, they are both a perpetuity, so there is no maturity date, and that makes them long duration. But also, they're even longer duration than a perpetual bond because their cash flow…”

“Historically, they traded at a 25% discount, and they undergrew by three percent a year, and it turns out that a 25% discount and three percent a year undergrowth allows you to outperform by a point a year.”

“Given how low rates have been, and indeed how tight credit spreads have been, private equity firms have had an enhanced ability to buy growth companies and take them private. We've also had a world where, frankly, the big dominant companies have bought a lot o…”

“One of the obnoxious questions we asked Ask the audience is, how many of you think you are better than average at finding active managers? The surprising thing was, I think, 18% of the audience said they did not think they were better than average.”

“Historically, apart from events of, frankly, revolution and regime change, we haven't seen profoundly dilutive events. We've seen things where you got diluted A few percent, maybe as much as five percent.”

“But one of the things I think we got wrong in our forecast was we said implicitly that that unwinding is going to occur in the same kind of timeframe as cyclical fluctuations in earnings.”