Our Philosophy

Dedicated to the Exploration of Moats and High Quality Businesses

Say you’ve got an old-school punch card. An all-summer amusement park pass for the kids. Or a loyalty card, offering up good prices on a spectrum of attractive goods and services over the course of a year.
But there are a few rules.

You can only buy one card, for a set price. Moreover, each ride–product or service–is worth a different number of points: Some cost more than others. Plus, you don’t get unlimited options. You only get 20 available punch-spots. Once the last one is punched, that’s it: You’re spent out.

Wouldn’t you think more carefully about which ride–or which service or product–offered the biggest bang for the buck–if you knew you only had 20 choices to make?

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Analytical Framework

We approach any proposed investment with a great deal of humility. We start from the premise that the future of a company is not knowable. Thus, there will always be a zone of ignorance. Our mission is to reduce that zone until it’s small enough to convince us that probability is in our favor. Read more

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Competitive Moats

The moat analogy, another Buffett credit, works like this. A company’s assets are like a castle, with a surrounding moat to keep competitors from invading and looting its treasured advantages. In investing terms, competitive moats are well-stocked with special advantages that secure their market leadership, consistently outperforming competitors selling similar goods or services. Read more

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Valuation Risks

Many, many super geniuses are certain that mathematical modeling can predict a portfolio’s maximum possible loss. But they really can’t eliminate the zone of ignorance–that is, what is going to happen in the future. Read more

Punch of the week

Thoughts and analysis from the Punch Card team


A Closer Look at Live Nation’s Acquisition Strategy

March 21, 2016 Moats 3 Comments

Back in March 2015, I wrote a blog post on Live Nation Entertainment (LYV).  This…

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“Welcome to Adult Life”: American Express, Synchrony Financial & the Changing Credit Card Landscape

March 8, 2016 Moats 20 Comments

Two years ago, I investigated the moat around American Express’s (AXP) business.  I assessed the…

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Reconsidering OnDeck & Data Network Effects

February 12, 2016 Moats 4 Comments

In my post on OnDeck (ONDK) I included the collection of user data as key…

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An Ephemeral Form of Value: Thoughts on the 2015 Pershing Square Investor Letter

January 29, 2016 Moats 16 Comments

The 2015 annual letter from Bill Ackman’s Pershing Square makes for some interesting reading.  After…

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Time Warner (TWX): A Compelling Short?

January 26, 2016 Moats 2 Comments

There is an interesting short thesis for Time Warner Inc. (TWX) on VIC. The author…

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OnDeck Capital (ONDK) & The Re-Engineering of Small Business Lending

January 19, 2016 Moats 6 Comments

Jamie Dimon, the chief executive of JPMorgan Chase, warned in his 2014 annual shareholder letter…

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