How to handle signs of a bubble in quality stocks with influential newsletter editor Whitney Tilson.

Speaking of the quality bubble, how concerned are you about that impacting the rest of the market? Or is it reflective of what's going on in the market as a whole? Is it a danger signal for investors in any way?

I'll answer that question two ways.

The first way is only about once every 10 years do I make a big market call.

I'm a bottoms up stock picker.

I look at individual companies, try and buy quality companies at reasonable prices and hold them for a long period of time.

That's what I think any sensible investor should do.

And that's what Warren Buffett's done his entire career.

seeing a general bubble out there in the marketplace.

Today's market does not remind me of March of 2000 at the peak of the nifty 50 internet bubble or right before the global financial crisis.

It is a fairly richly valued market, but I think justifiably so.

The US economy is actually doing quite well.

Corporate profits are doing well.

Corporate balance sheets are strong.

But I would just caution investors, don't chase whatever's hot.

They sure got burned chasing meme stocks and SPACs a few years ago.

Today, I think investors who got burned sort of fled to higher quality companies, the mega cap tech giants, the NVIDIAs and the Apples.

Today, I'm seeing small cap stocks, traditional value stocks today, trading at relative discounts to growth stocks and big cap stocks that remind me again back of 1999, 2000, when value stocks and smaller cap stocks had a tremendous run, tremendous outperformance after the bursting of that bubble.

Define what a quality company means to you, the kinds of companies that you're looking for.

There's no secret sauce here.

I'm looking for the same things everybody's looking for.

You know, a company that has a strong brand, a product either that delivers enormous value or has a proprietary, like a patented drug like Lilly and their Mongero, their weight loss drugs.

The obvious companies ranging from super high margin businesses like pharmaceuticals or Microsoft and Meta and Alphabet and Apple, or companies like Costco that make very slim margins, but that's their competitive advantage.

They're the low cost provider, right? But companies mostly that have a long growth runway in front of them.

I would say the second biggest mistake in my investing career, if the first one was not letting my winners run.

um and you know it's so painful to me to admit that i owned apple at 35 cents 25 years ago all i had to do was hold that those shares and i'd be flying around in a private jet today right i owned netflix at eight dollars i owned amazon at two dollars and forty cents i owned mcdonald's and home depot and some of the world's greatest companies but you know i they doubled my i'm doubled my money and i didn't want to be greedy right uh my second uh biggest mistake is is not not appreciating that The price you pay for a stock today is important, and you don't want to pay 50 times earnings for almost any company.