V15 (and IV10, IV12, IV18, IV 20..), Two New Buys, One Addition to a Position
The great tension in my valuation process is that a low multiple is not necessarily a value. Roots are important, and they are there, but my valuation process since the 1990s has not hinged on a 1940 version of value, apologies to Graham and Dodd.
IV15 is the benchmark for me when valuing stocks, but a higher quality business could be a fat pitch above that mark, and a lower quality business perhaps could be a fat pitch well below that mark.
Home Page for Michael Burry's Substack: https://michaeljburry.substack.com/
As well, IV15, the price at which I expect compounded annual returns of 15% over 15 years, is not a simple PE ratio.
IV15 is a buy price target. It comes from a discounted cash flows analysis that pulls from the quality of the buisness as well as from conservative adjustments to owners’ earnings due to stock-based compensation, bedeviled accounting, and other factors. The cash flow analysis generally has three stages but adds a fourth stage for inflecting growth companies and also adjusts for other special cases, including serial acquirers.
This methodology is explained in good detail in D’AI of the Triffids: Office Software Triage.
D'AI of the Triffids: Office Software Triage
Going forward, I author 1500-word abridged versions of all my posts, separate and apart from the feature-length articles.
D'AI of the Triffids: Office Software Triage (Abridged Version)
IV15 is not as low a price per share as IV18 or IV20, and it is a lower price per share than IV12 or IV10. When I analyze a stock, I set alerts at all these prices.
I expanded on this methodology in Software and Payments Stocks Part II: Productivity and Cybersecurity.
Software & Payments Stocks Part II: Productivity Tools and Cybersecurity
Since Part 1, I added four names – Synopsys (SNPS), Cadence Design Systems (CDNS), JFrog (FROG) and Samsara (IOT) – so the Cassandra Unchained software and payments universe is now 50 stocks, the SW50.
And, of course, the abridged version.
[[Abridged] Software & Payments Stocks Part II: Productivity Tools and Cybersecurityhttps://michaeljburry.substack.com/p/abridged-software-and-payments-stocks
Baseline intrinsic value typically sits somewhere between IV8 and IV10 depending on the business qualities.
Below baseline intrinsic value is where share buybacks actually are accretive to insrinsic value per share. Buybacks above that level may pull shares in but dilute (and thus reduce) intrinsic value per share. This is the depressing nuance of all these tech companies buying back shares at high prices to offset part of stock-based compensation.
The All Map, a baseball field-type visual, summarizes this by splitting companies into Fat Pitches, Just Outside, and The Out Field according to IV15 multiple, AICT Tier and Compositie Score.
I played baseball through the age of 14 and love the sport.
So, today I purchased two new positions, and I added to one.
The full article is available on Michael Burry's Substack.
Or, please refer to the direct link below.
https://michaeljburry.substack.com/p/trading-post-july-8-2026
Home Page for Michael Burry's Substack: https://michaeljburry.substack.com/
