Derek Bergen

Partner, | Valuation Advocate | Badger

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Studying the net present value of persistent economic profit. Anything less would be uncivilized!

[Derek Bergen @dk_bergen]

"Value" is the most conflated concept in finance. A robust intrinsic value framework measures NPV of persistent economic profit, yet many investors prefer p/x shortcuts.

Intrinsic value's important, yet overlooked, role in factor construction & asset pricing is clear.

(1/n)

[Derek Bergen @dk_bergen]

@JeffWeniger Incredibly important context:

NVDA, MSFT, META, AVGO, LLY, V, ORCL, MA, NFLX, TXN, ANET, SPGI, ADI, PLD, MCO, MAR, HLT, PSA, CPRT, MSCI, VRSK, FICO, VRSN & TPL all have EBITDA Margins > 40% and represent 26.8% of the S&P market cap. (20.6% of market cap for EBITDA Margins > 50%)

[Derek Bergen @dk_bergen]

@TheStalwart Same here - is there an accepted timeframe to transition "current events" to "past events" when writing History textbooks?

My AP History teacher got props for showing the class Metallica's "One" video as part of WW1 curriculum. Is there a good cold war equivalent in grunge era?

[Derek Bergen @dk_bergen]

@AlanMCole My Power BI PowerPoint exports fail to download in Edge, but the download works just fine in Chrome.

Make it make sense!

[Derek Bergen @dk_bergen]

@dougboneparth Hear me out:

What if it's for a position selling whole life insurance and the parents sign up on the spot?

[Derek Bergen @dk_bergen]

@pmje73 https://t.co/SEC7EVEQvX

[Derek Bergen @dk_bergen]

If you don't think the stock market is a weighing machine over the long term, your scale is probably broken.

[Derek Bergen @dk_bergen]

@pmje73 Many "market is broken" perspectives are rooted in the underperformance of price multiples or overall market's high CAPE.

But, markets appear more rational when "value" correct biases against intangible investment and give firms credit for persistent high profits and investment.

[Derek Bergen @dk_bergen]

If you don't think the stock market is a weighing machine over the long term, your scale is probably broken.

[Derek Bergen @dk_bergen]

@TrungTPhan The explanation from Brian Eno alludes to the same spirit of the famous Bruce Lee quote:

"I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times."

[Derek Bergen @dk_bergen]

@TheStalwart For megacaps, it's not just growth rates.

It's that economic profits are currently much higher than peers. Tethered to their investment opportunities, competitive advantages & access to cheap(er) financing, NPV of their cash flow is more attractive than price multiples suggest.

[Derek Bergen @dk_bergen]

@TheStalwart Markets appear more rational through the lens of a valuation framework that:

-Corrects biases against intangible investment.
-Credits firms for persistent economic profit & organic investment.

If markets aren't broken, maybe the valuation shortcuts are!

[Derek Bergen @dk_bergen]

@AaronLemingNFL There's enough evidence that the lakefront might have been the target all along. ($B in federal grants for transit hub, Bob Dunn's history in stadium projects, ground needed to break last year for 2026 completion to get out of soldier field lease early)

https://t.co/bmlEfdUcvw

[Derek Bergen @dk_bergen]

@Suntimes Don't sleep on the impact sports teams have on development politics.

If Bears ownership really decide it's best to move then they should.

At the same time, I can't shake that this is a ploy for city council to keep the Bears downtown and greenlight this: https://t.co/QzYNfZTPtx

[Derek Bergen @dk_bergen]

@danorlovsky7 Not sure where this narrative came from that Fields personally is against sticking around another year if they draft a QB in round 1.

His best opportunity to prove he's a franchise QB is next season with this Bears roster.

Why would he give that up if a rookie sits to develop?

[Derek Bergen @dk_bergen]

@MaxMarkhamNFL The Raiders have a stellar track record in coaching staff hiring decisions, right?

[Derek Bergen @dk_bergen]

@CrainsChicago Maybe Arlington Heights was a ploy for leverage to get the city council to approve a megadevelopment in the South Loop all along?

https://t.co/Rnj9ZrJD68

[Derek Bergen @dk_bergen]

@Suntimes Don't sleep on the impact sports teams have on development politics.

If Bears ownership really decide it's best to move then they should.

At the same time, I can't shake that this is a ploy for city council to keep the Bears downtown and greenlight this: https://t.co/QzYNfZTPtx

[Derek Bergen @dk_bergen]

@TheStalwart The corollary to this is already widely discussed in housing.

Existing homeowners benefitted from the drop in mortgage rates and (for the most part) still experience those benefits; families attempting to purchase their first home today are mostly priced-out due to higher rates.

[Derek Bergen @dk_bergen]

@TheStalwart When rates fell all firms benefitted; it was tempting to expect all stocks to fall as rates soared.

Meanwhile, profitable firms able to self-finance reinvestment were subject to muted rate impact; their moats even strengthened as unprofitable peers lost access to outside capital

[Derek Bergen @dk_bergen]

@idjmoore

Please make sure you load this on your phone and play I for Justin right before you head out of the locker room Sunday!

[Clay Harbor @clayharbs82]

Love this from Kyle Brandt on Justin Fields 😂 #DaBears #Bears

[Derek Bergen @dk_bergen]

@BullandBaird This concept translates to stock market, too:

Profitable firms that took advantage of low-rate debt can now self-finance incremental investment or return capital to shareholders; meanwhile, it's nearly impossible for new entrants to get external financing to scale up & compete.

[Derek Bergen @dk_bergen]

@carlypearce Amazing & thanks for this! Her name is Nicole Bergen.