Dave’s Blog for OC & The World

Robert Hagstrom gives a good description of Buffett’s style of focus investing; basically investing in 10-15 companies you understand very well and can monitor closely rather than investing in more companies that you can’t understand as well or monitor as closely.
Hagstrom then goes on to argue that Buffett’s value investing principles can be applied to “new economy” companies, aka technology companies. As his example, he points to AOL as a company with enduring value, with few other examples. Looking at how AOL has fared since the publication of the book in 2001, it has definitely not been a shining example of enduring value: per the wiki, AOL’s subscriber base has declined from 30 million to 10 million, and total stock value declined from $226 billion to $20 billion.