Is Value Investing Dead?

Alex Davis says the only thing he wrestles with before writing a check is regulatory, meaning whether a regulatory problem was a reason to pass. The price is not the wrestle. He published a letter saying value investing is dead, and he allows that the line may have been taken out of context. The claim underneath is that nobody knows where the valuation of most of these companies ends, or what the ceiling is.

Anthropic, two years ago, is the example. A model that marked the company at $30 billion and called the result a 2x would have missed a path to $100 billion of annual recurring revenue inside two years. The habit he is arguing with is buying a good company only at a discount. He states that rule as a 6 percent discount or no investment. His own argument is to buy a great company, full stop. Price still deserves attention. It is not what produced the results. A 5 percent discount or a 15 percent premium is not the outcome. Looking back, the record did not come from sharpening a pencil on the entry price. The great outcomes were exponential.