Imagine a business that grew its book value per share by roughly 24% last year, earns a 30% return on equity, buys back its own stock by the truckload, and just mailed shareholders a $2 special dividend on top of it all. Now imagine the market hands you that business
Imagine a business that earns a ~12% return on equity, sells for less than the cash-and-bonds value of its own balance sheet (about 0.9x book, roughly 8% below book value), trades at a P/E of 8, and spends its spare change repurchasing its own stock only when it&
Because it purchased every stock when it becomes large (for only 0.01% position) and held on to it forever. Very few people purchased Nvidia in 2001 despite dotcom bubble and never bought or sold any shares. The so-called "rebalance" doesn't really buy any existing shares
A London-listed insurance private equity firm trades at £240M market cap against £350M book value — a 31% discount to NAV. The same NAV has compounded at 18.5% per year for the last nine years (11% per year since 2005). Of 23 current investments, exactly one is marked below cost.