Hi! Buffet often proposes a different model of stock selection: Predicting the long term earnings, profitability, and compounding potential, assessing the competence of management of a company, generating a minimum likely future price, and buying if there is a significant margin of safety and you're capable of understanding the business. The theory espouses is that in the long term, investment returns track to the earnings of the business. Turtle Creek?

Certain people, such as Monish Pabrai and Turtle Creek, have been able to replicate this methodology with success, so it seems to be valid empirically. How do you distinguish between the causal validity of the academic factor model (low price = risky, risky = discount) and this approach, which simply assumes markets make enough pricing mistakes? Do you think they are equivalent?