At Berkshire Hathaway's annual meeting, Warren Buffett made some points that were very anti-Warren Buffett.
We have become an asset-light economy. We need to change our fundamental models to adapt to capital-light companies.
- Liqudity and Solvency Ratios for tech companies can be laughably high due to very low capital requirements
At the birth of value investing Ben Graham asked the fundamental question:
What would a company be worth if it liquidated its assets and paid off its liabilities?
And thus, value investing was born. With Buffett's comments, traditional money managers are left with the question, are these tech companies that break traditional models here to stay? And if so, how can you accurately price equity in a company with such low cap requirements and unique business models?
How do you think tech companies will force investors to change?
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