Speaker unverified: evaluation

Transcript context

…I'm wondering if even just thinking about this past two year COVID cycle, you've seen this happen. The stocks that were huge multiverse winners in the beginning, the Pelotons, the Zooms and the like. I'm thinking of Zoom. Zoom went from, I don't know what $70–$80 a share to $600 a share, and then back down to, I think it's at $280 right now. You've seen this happen, right? The optionality played out. That was correct, but then returns pulled back. We're always looking at what's happening to the range of outcomes. Is it widening? Is it getting broader? Is it prediction becoming safer or is it remaining narrow? So with a company like Zoom, it looks a lot to us like a feature. Now the question is, can it become a product and eventually, maybe a platform? Can it develop an ecosystem around it? We don't know. To take your example, let's say in the middle of the pandemic, it was sort of a cool feature. It was better than everything else on the market. It still is. Then this big ecosystem came around it and it became a full-blown platform. Then the range of outcomes would narrow and the prediction would get safer. That would warrant that becoming a bigger portion of the portfolio. Valuation is a key piece. This is the piece that we get everyday as public investors. Expensive valuations force predictions. I have to believe a lot more at 10 times sales than I do at 10 times earnings. We're seeing, what is the prediction of the company, what is the prediction the market is forcing us into, and are we comfortable with that? We are in an unprecedented investment climate where everything on a whatever basis you want to revenue multiples, earning multiples, unprecedented highs. Any asset you could invest in, be it stocks, or farms, or crypto is forcing you to make predictions. What I've heard this whole podcast so far is you actively avoid trying to make predictions. How do you respond in an environment where there's very little resilience in your ability to invest without making a prediction and have a margin of safety there?…

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