
How Amazon's Numbers Broke Value Investing
To be successful with , you have to know what a business is worth. But what if the old rulebook for valuing companies is broken?
To be successful with , you have to know what a business is worth. But what if the old rulebook for valuing companies is broken?
If you look at Alphabet (Google's parent company) and Amazon, you might assume Alphabet is the better business. It's mostly software-based and doesn't require a lot of physical assets to run—a model of a modern, efficient company. Amazon, on the other hand, has old-school bones. It has poured billions into building out a massive physical network for its e-commerce business and has done the same for its cloud computing arm, Amazon Web Services.
If you're interested in , you eventually realize that a company's long-term performance is driven by its quality. To succeed, you have to get good at spotting what makes one business truly superior to another. This skill really comes down to one thing: identifying a company's competitive advantage.
In 1950, a young Warren Buffett from Omaha walked into Benjamin Graham’s class at Columbia Business School and found a system that felt like a revelation. For anyone wondering , Graham’s method was like a perfect cookbook: a formulaic, easy-to-follow guide with strict rules. It was a framework that would help turn Buffett into a billionaire. But over time, the student realized the world had changed, and the teacher’s old recipes were no longer enough.
Benjamin Graham, the man who would become known as the father of modern security analysis, was an intellectual at heart. He spoke seven languages and could quote classic authors in their native French, German, or ancient Greek. He was also famously absent-minded, known for inventing a new slide rule while also showing up to work in mismatched shoes. After graduating from Columbia in just two and a half years, he turned down teaching positions in math, English, and philosophy to support his family, choosing the one field with the highest earning potential: finance.
My early picture of Wall Street was a complete caricature. When I started my finance career twenty-five years ago, I imagined a world of testosterone-fueled cowboys and sharks, shouting into phones and waving their arms on the stock exchange floor. I couldn't have been more wrong.
When it comes to investing, Warren Buffett famously said he looks for three things in people: integrity, intelligence, and energy—and that without the first one, the other two are dangerous. This same principle applies when you're in companies. Hitting your financial targets is great, but it's just as important to think about the real-world impact of your investments, especially in an area like that directly shapes our communities.
Have you ever watched an old, forgotten warehouse slowly transform into a block of trendy lofts and wondered how it all happens? Or seen a vacant lot turn into a sleek office building and thought about what it would be like to be part of that process? For many, this is the most exciting side of —moving beyond being a spectator to becoming an investor who makes these transformations a reality.
What if you could see where the real estate investment trust (REIT) industry is headed? Imagine understanding how new technology is reshaping the market or how economic shifts could affect property values around the world. It’s an exciting thought, and it’s exactly what we’re going to explore.