Owner earnings
Reported earnings plus non-cash charges, minus the capex required to stand still. Cash the owner could take out without shrinking the engine.
Framework
Buffett’s owner test, with tech inside the circle.
The original rules did not ban technology. They banned businesses the owner could not understand. Longhold keeps the rules and updates the circle of competence.
What we kept
A moat you can name
Switching costs, networks, scale, cost, brand, or intangibles. If you cannot say which, you do not have one. A slogan is not a moat.
A ten-year hold
Would you be comfortable owning the whole business with no quote for a decade? If the answer depends on a multiple expansion, it is a trade.
What we changed
Buffett sat out much of software because the product cycle looked like a coin flip from Omaha. A tech-fluent owner can underwrite CUDA lock-in, foundry process recipes, identity graphs, and workflow systems of record the same way he underwrote See’s candy or a railroad: scarce assets, customer captivity, incremental returns on capital.
- Moat weights favor switching costs, networks, and IP over consumer brand — so a lithography monopoly can outrank a soda logo.
- Tech is not a bonus. Intel and PayPal sit in this book as failed or fading moats. Quality is empirical.
- Valuation is owner-earnings yield versus quality, not a single P/E cut. A fortress can be fairly expensive. A fragile name is never cheap enough to hold for ten years.
The score
Longhold = 40% earnings power + 35% moat width + 25% ten-year hold. Horizon labels: Forever (88+), Decade (72+), Five years (55+), Trade (40+), Pass.
40%
Earnings power
Consistency, free cash conversion, ROIC, leverage.
35%
Moat width
Switching, network, IP, scale — including durable tech moats.
25%
Ten-year hold
Will the cash engine still be essential in 2036?
Owner earnings calculator
Net income + depreciation − maintenance-like capex − increase in working capital. Units are billions. The yield is owner earnings over market cap.
- Owner earnings
- $78.0B
- Earnings yield
- 2.5%
Honesty
Figures in the universe are owner-level estimates for scoring — representative 2016–2025 paths, not a live market feed. Do not trade on them. Use the dossiers to practice the questions; verify filings before you commit capital. This is a research desk, not a broker.