BKNG - trivago: Fair Company Wonderful Price

2024-04-29 15:08:15 ET

Summary

• Contrary to popular belief, Warren Buffett earned his greatest returns when focusing on fair companies trading at wonderful prices.
• trivago, still reeling from COVID-19 fallout and facing increasing competitive pressures, is by no means a wonderful company.
• Although, while not strictly meeting the criteria for a Benjamin Graham "cigar butt", trivago is potentially trading at a cheap enough valuation to be considered "wonderfully priced".

Summary

Most of today's value investors are intimately familiar with Warren Buffett's investment philosophy, which can be summed up with one of his most popular quotes : "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." While this is true for an investor of Buffett's enormous scale, things were much different in his early years, when he was managing a significantly smaller fund. In those days, when Buffett achieved his greatest returns , his investment style was more akin to Benjamin Graham's; buying fair (and much smaller) businesses for wonderful prices....

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