Taking a position, page-15

Businesses with defensible moats around them generally never sell for much less than a forward PE equal to the growth rate. You pay a high price to get in, but if you can sit on your hands for 10 years you get a lot of growth compounded without tax.

Businesses with flimsy business models usually sell at dirt cheap prices. And this is because eventually they get in trouble and wipe out a substantial part of equity.

You can't use the high valuation of a business with a sustainable competitive advantage in direct comparison to the low valuation of a business that has no competitive advantage. Cheap isn't cheap when you have such a large chance of permanent impairment to capital over the next five years.