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"EVERY MOMENT IN BUSINESS happens only once.
The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them." - Peter Thiel
As you learn history, this cannot be any more true, and I would expand this idea further. I project that the next Warren Buffett won't be a bottom-up investor. But rather an ALL-AROUND investor.
In the beginning of the new Security Analysis 7th Ed, Seth Klarman acknowledges the significance of the recent developments of macroeconomic impacts on investing, which traditional value Investors would've disregarded as "un-knowable" factors. I do think it is a naive behavior to think that "value investing" will continue to rely solely on the traditional bottom-up approach. Though I'm not discounting any of the importance of researching and analyzing economics of companies at the corporate level, I'm emphasizing that the difficulty level of investing will be significantly raised in the upcoming future.
4 quadrants of possible economic scenarios in the future:
1. High Growth, High Inflation
2. High Growth, Low Inflation
3. Low Growth, Low Inflation
4. Low Growth, High Inflation
As hindsight is always 20/20, we can agree that for the past 40 years, every business cycles were bouncing between 2 And 3, High Growth, Low Inflation and Low Growth Low Inflation. And If we accept a new premise that now the game will be balancing between the 4 different scenarios instead of 2 of the Low Inflation scenarios for whatever the reasons (I'm not going into details about them in this writing, but you can refer to the last three books written by Ray Dalio) , the level of difficulty in investing skyrockets, like trying to find connections between 2 solutions to 4 solutions.
In 2000 BC, ancient Babylonians already knew how to solve a quadratic formula, where answers rely on only 2 values. Then it took 3500 years for Lodovico Ferrari to come up with solutions to a quartic equation, and comparing quadratic to quartic formulas, the level of difficulty in solving for 4 values gets astronomical from something you can just explain on a scrap of paper (with an exaggeration).
So when it comes to quantitative analysis in value investing, traditionally dominated black-and-white, simple mechanistical way of thinking in business (I really mean it by saying today's materials taught in MBAs are way too rudimentary to a higher-degree analytical thinking) will be replaced by more sophisticated statistical approach since we cannot really solve a much more complex system with our current knowledge, and this is how we all will have to walk blindfolded in gauging macroeconomic impacts on businesses because whether there's a certain commodity price Inflation or where the government decides to pour capitals into might really influence, if not determine your future investment returns.
In that context, I'm looking into the future, and I can't be sure if the title "The Next Warren Buffett" will be used at all, but the next "The Greatest Investor of All Time" will refer to someone who have figured out to have statistical edge that compounded in all aspects of investing, from fundamental and qualitative analysis of business and its business models, moats, and management, all the way up to the information that has traditionally been deemed as an "un-knowable" information by many value investors.
Everything evolves. Value investing will NOT an exception.