Tren Griffin @trengriffin I work for Microsoft. Previously I was a partner at Eagle River, a private equity firm established by Craig McCaw. I am on the board of directors of Kymeta. Jan. 10, 2020 1 min read

My work has taught me: valuing a subscription business is similar to valuing a portfolio of annuities, but is in large part a black art requiring good judgement, which comes from observing and participating in a lot of bad judgement. Also: Profits Are an Opinion, Cash Is a Fact.

2/ "A perfect business in terms of the simplicity of valuation would be an annuity; an annuity generates an annual stream of cash that either remains constant or grows at a steady rate every year. Real businesses, even the best ones, are unfortunately not annuities.” Seth Klarman

3/ To assess whether a stock can be purchased at a discount to value investors are forced to be detectives and seek clues about long term future cash flows.

"Most investors avoid the difficulty of forecasting long-term cash flows by ignoring them." 

You can follow @trengriffin.


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