What's going on in undervalued good businesses?
The Personal Way of Understanding
This personal way involves repeated exposure without greed. Understanding happens naturally, without ego. True comprehension often arrives suddenly, like an insight emerging from deep immersion.
To achieve this level of understanding, I must immerse myself in the company.
Does a particular company trigger my immersion?
This may sound too intuitive and subjective, but it’s an important filter. If a company does not naturally draw me in, it is likely not suitable for me to invest in.
So, what causes immersion?
Genuine care from others. Deep and meaningful communication fosters immersion.
Thoughtful writing. Books or texts that feel as if the author is speaking directly to me create a deep connection.
Warren Buffett summed it up well: "Delight your customer."
If someone deeply cares about a company, there is an important reason behind it. However, the reverse is not necessarily true—just because I believe I should care about a company does not mean it is inherently important.
Future Cash Flow and Business Longevity
Valuing future cash flow is the golden rule for valuation. However, current cash flow may be reinvested for growth, while future cash flow is inherently uncertain—even if today's financials are strong, then it causes people’s afraid.
Future cash flow depends on:
People’s willingness to maintain contracts.
People’s willingness to repurchase and use products repeatedly.
Management’s commitment to capital efficiency.
These are natural outcomes of a company’s culture—its operating system.
Why discount the future? Because it is quiet, implicit, and looks uncertain.
Even when no explicit reason is immediately visible, if I cannot help but care about a business, there is a strong possibility that something truly important is happening beneath the surface.