EP.003: Pool Corp ($POOL): Reverse Engineering Berkshire’s Investment, Buying a Great Company in a Lull

Doug Garber reverse engineers Berkshire Hathaway's investment in Pool Corp (POOL) to understand their investment thesis. He uses an eight-step checklist mirroring Berkshire's process, assessing Pool Corp's circle of competence, intrinsic value, potential variant view, industry, business quality, moat, and management alignment. Garber notes Pool Corp's current downturn after COVID-related growth, a high short interest, and negative earnings revisions. He values the company based on historical free cash flow and reverse DCF, questioning its current price. While acknowledging Pool Corp as a great business in a good industry with a wide moat and aligned management incentives, he deems it currently too expensive, preferring to revisit it at a lower price point. He also explains how AlphaSense's Tegas expert library can be used to create an edge and enhance portfolio returns.