However, it’s important that when analyzing these businesses we use the same value-based framework handed down to us by Warren Buffett and his teacher, Ben Graham.
Seen from a “Value 3.0” perspective, these companies are the General Motors and Coca-Cola of our generation. But enough time has passed that it’s clear this scorn is misplaced. Defined as those who weigh the difference between price paid and value received, value investors have historically discounted stocks like Apple and Amazon as boom-and-bust miscreations of the millennium. We chose Tencent Holdings as the inaugural stock because it’s a natural follow-up to a Fortune piece I wrote in November suggesting that the value investing community, of which I am proud to be part, needs to adjust its focus to encompass technology stocks. The title- “Valuation”-is simple on purpose. Thus we’ve agreed to start a regular column in which I lay out my analysis and decision-making process about a single publicly traded company. It’s true that investing can be complex, but as a former journalist and current money manager I have long thought that like all professions, it can be demystified using a combination of experience, clear thinking and plain speech. Fortune wants to enhance its coverage of investing for executives who know a lot about business but not quite enough about the stock market to feel confident when making public-market decisions.
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