We at UNIO believe that what is driving M&A activity is not so much confidence in the future as much as concern that revenue and profit growth will be harder to come by.
Revenue growth will struggle precisely because the economic landscape will be slow. Profit growth will be grinding because—at 50-year highs in profit margins—it will take every ounce of extra revenue to bring extra growth to the bottom line. We think CEOs and boards sense this problem lies ahead.
Either Warren Buffett is the great investment magician who has been breaking all his own rules left and right. Or he is something else. I think he is something else. I think Buffett is the ultimate broadband investor.
Although I suspect you have never heard of investing described this way, one can categorize investors as being narrowband or broadband.
A deep-value investor who looks for investments that sell at 50% of their intrinsic value and sells them when they reach 100%, fits the description of a narrowband investor.
An investor who looks at multiple factors—perhaps including, but necessarily limited to, value—to make an investment purchase (and then at multiple factors to sell that investment) would better fit the description of a broadband investor.