Skippy & Doogles Weekly: Apple, Utilities & the PE Ratio That Fooled Everyone
🔥 Market Take of the Week
Valuation isn’t just about the number you see — it’s about what’s underneath it. Two companies can share the same PE ratio but have wildly different futures. Understanding steady-state value vs. future value creation is key to spotting opportunities the market is mispricing.
🎙 This Week’s Podcast — Episode 239: “Michael Mauboussin, PE Ratios & The Art of Future Value” (Listen: Apple, Spotify)
What do Apple and a Southern California utility have in common? In 2013 — a lot more than you think. This week, we unpack Michael Mauboussin’s framework for valuing companies, revisit the Apple vs. Edison International case, and break down key insights from his recent conversation with Seth Klarman.
The 2014 PE ratio paper that will blow your nerdy mind
Klarman’s interview with Michael Mauboussin and his take on market inefficiencies, investor psychology, and portfolio construction
📊 Investing Insight of the Week
Companies with high returns on invested capital (ROIC) and sustainable growth deserve premium valuations — but only if they can keep finding high-return opportunities. When ROIC drops toward the cost of capital, growth stops creating value.
🚀 Round the Horn
Nvidia is in a league of its own
The world may be running out of sand
The alcoholic beverage that may mean a recession is coming
Congress may finally have to stop stock trading…with a special carve out
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