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A Dynamic View of Intrinsic Value

July 12, 2017 : Permanent Link

(Harvest) Our investment strategy has always been to buy companies at a big discount to their intrinsic value and either a) be patient or b) act as a catalyst to close the gap or increase the intrinsic value over time. Sounds simple – but how do you determine intrinsic value? Even if you could determine intrinsic value today precisely, what if the company changes? The static view of intrinsic value is so incomplete that it can be a dangerous concept. The world is dynamic and we can only see a little bit up the road – even companies themselves can’t predict their own revenues a year out with the benefit of total inside information. We can estimate a range for intrinsic values but that too is limited when framed in linear thinking tied to today.

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