Berkshire requires a 25–50% discount to intrinsic value before buying.
Buffett Quality Checklist
✗ROE >15% consistently (≥7 of last 10 years)
✓Free cash flow positive (≥8 of last 10 years)
✓Conservative leverage — Debt/Equity below 1
✓Revenue growing at CAGR >5%
✓EPS growing at CAGR >5%
10-Year Financial History — SEC EDGAR 10-K Filings
Year▲
Revenue▲
Net Income▲
FCF▲
Owner Earnings▲
ROE▲
Net Margin▲
LT Debt▲
Cash▲
2016
$3.7B
$106.0M
$642.0M
$60.0M
2.0%
2.9%
$3.6B
$403.0M
2017
$3.9B
$729.0M
$765.0M
$681.0M
12.4%
18.5%
$3.1B
$377.0M
2018
$4.3B
$458.0M
$917.0M
$448.0M
8.4%
10.7%
$2.4B
$545.0M
2019
$4.3B
$774.0M
$836.0M
$736.0M
13.7%
18.2%
$3.0B
$332.0M
2020
$5.6B
$933.0M
$1.1B
$844.0M
14.5%
16.6%
$4.9B
$2.7B
2021
$5.9B
$1.2B
$920.0M
$1.1B
18.6%
20.2%
$4.3B
$393.0M
2022
$6.2B
$1.1B
$1.6B
$1.1B
18.3%
18.1%
$4.7B
$502.0M
2023
$6.1B
$1.1B
$1.5B
$1.0B
9.8%
17.5%
$9.7B
$453.0M
2024
$7.4B
$1.1B
$1.7B
$1.0B
10.0%
15.1%
$8.6B
$592.0M
2025
$8.3B
$1.8B
$2.0B
$1.7B
14.6%
21.6%
$8.6B
$604.0M
Warren & Charlie
Buffett / Munger — quality, moat & valuation
NASDAQ, INC. (NDAQ) — Investment Memo
🐂 The Bull Case (Warren's voice)
The Ultimate Toll Bridge: Nasdaq doesn't just "trade stocks"; it owns the legal right to collect a fee every time a specific set of assets changes hands. It is a government-sanctioned monopoly on its own listing territory.
The "Lindy Effect" Moat: The longer a company is listed on the Nasdaq, the more "prestige" the exchange gains, which attracts more companies. This is a self-reinforcing loop that is nearly impossible to disrupt with a new competitor.
Pivot to Annuity: The genius here is the shift from cyclical trading volume (which fluctuates with market mood) to recurring software subscriptions (Adenza). They are turning a volatile casino into a predictable utility.
Operating Leverage: The marginal cost of adding one more software client or one more listing is nearly zero. Growth flows directly to the bottom line.
Attractive Entry: This becomes a Berkshire-grade investment when the market ignores the software pivot and prices it as a simple, cyclical exchange. We want it when the "FinTech" premium vanishes, but the "Toll Bridge" reality remains.
🐻 The Bear Case (Charlie inverts)
The Debt Trap: Management traded a clean balance sheet for growth. Debt ballooned from $4.7B to $9.7B for the Adenza acquisition. If the projected synergies are a fantasy, the interest payments will cannibalize the FCF.
Regulatory Cap: The biggest risk isn't a competitor; it's the SEC. If the government decides exchange fees are "excessive" and imposes price caps (treating them like a regulated electric utility), the moat is breached from the top down.
The "FinTech" Delusion: There is a risk that Nasdaq is trying to be something it isn't. Moving from a regulatory monopoly (Exchange) to a competitive software market (SaaS) exposes them to agile competitors who don't have the legacy baggage of a listing house.
Most Likely Failure: Integration risk. The Adenza deal is massive. If they fail to integrate the culture and tech, they've spent $10B to buy a headache and a mountain of debt. Timeframe: 3–5 years.
💰 Valuation & Margin of Safety
Intrinsic value estimate: $106.57 per share
25% margin of safety entry: $79.93(conservative)
50% margin of safety entry: $53.29(Buffett's ideal)
Current Status: Fairly valued to slightly undervalued (depending on current spot price). The market is pricing in the growth, but not the debt risk. We are not yet at the "fat pitch" stage.
Verdict: WATCH
The intrinsic value of $106.57 provides a comfortable ceiling, but the $9.7B debt load requires more evidence of successful integration. We wait for a market spasm to drive the price toward the $79 range before committing significant capital. Conviction in the moat is high; conviction in the current leverage is low.
Other Analyst Views· Lynch · Damodaran
Research Notes· Money Model · Moat · Financials · Management
Data sourced from SEC EDGAR XBRL filings (10-K only). For educational purposes — not investment advice.