Todd Combs: 99% Of My Analysis With Warren Buffett Is Qualitative

HFA Padded
The Acquirer's Multiple
Published on

During his recent interview on the I Am Home Podcast, Todd Combs explained why 99% of the analysis he does with Warren Buffett is qualitative. Here’s an excerpt from the interview:

On This Page

Q1 2023 hedge fund letters, conferences and more

Combs: And so when Warren and I would talk about stocks, acquisitions, whatever, we talked… it’s 95, 99%, qualitative. And that comes down to all the stuff that you talked about in terms of moats, barriers to entry, all the stuff.

You’re not getting that necessarily in a filing or an annual report. You get a sense for it. It’s a starting point, but you want to work essentially inside out.

And I think which is what I mean by that is starting with the details, and then those details form the foundation from which you can build upon that.

You then gain a qualitative understanding. And I personally feel like too many people start outside in, and what I mean by that is they’re starting with a narrative.

They’re starting because they heard something from someone, or they saw it on CNBC, or they read a research report or what have you.

And if you start with any narrative, one of the real cognitive dissonances that we can all have our blind spots is that then you start forming all of your opinions based on a loose narrative, that you formed, that was completely erroneous to begin with.

So it’s no different than the scientific process. You don’t start with a narrative and try and prove it. You start with the facts and build it from there.

You can listen to the entire discussion here:

For all the latest news and podcasts, join our free newsletter here.

FREE Stock Screener

Article by The Acquirer’s Multiple.

HFA Padded

Tobias Carlisle is the founder of The Acquirer’s Multiple®. He is also the founder of Acquirers Funds®. The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates.