The Nature of Value

Nick Gogerty is a private account strategist and general problem solver for the world's leading hedge funds, banks, technology firms, and scientific research institutes. He has worked as a quantitative developer and trader on a proprietary foreign exchange desk in London, advised major institutions and the government on risk, and been a serial entrepreneur at the convergence of technology and media. He is deeply interested in creating sustainable economic value and reducing global poverty.

The Nature of Value presents a theory of how economic value functions and how it drives growth, starting with tiny sparks of innovation and scaling all the way up to the full scope of the economy. Nick Gogertys exploration of value borrows from a wide array of disciplines, including anthropology, psychology, physics, sociology, and ethics, but most of all, it examines how evolutions processes can help investors understand the economy and how investors can use this new understanding to improve their allocation decisions.

In the great tradition of Charlie Munger's 'worldly wisdom,' Nick Gogerty delivers a multidisciplinary approach to finding investment value. Through brilliant graphics and a unique lens, he educates the reader on how to discern investment opportunities that go well beyond currently reported financial results to gain insights into how value shifts over time. Any investor who feels the 'value investing' paradigm is lacking in its ability to navigate our increasingly complex world will benefit from the tools Gogerty offers. -- Paul Johnson, Columbia Business School The convergence of economics and biology is fertile ground that offers a path out of the dark age of static equilibrium and efficient markets. Nick Gogerty's illuminating book gives us a deeper and more robust understanding of the complex dynamics that create and sustain value. -- Steve Waite, author of Quantum Investing and Boomernomics Nick Gogerty has done a phenomenal job of developing and clarifying economic value when it comes to equity investing. His book incorporates new thinking about the economy as a dynamically evolving, complex, adaptive system. Gogerty introduces new ways to apply these concepts on the granular scale of the firm. This book will certainly enhance the reader's ability to make good investments and is a must-read for any thoughtful investor. -- Guy Spier, Managing Partner, Aquamarine Capital, author of The Education of a Value Investor

PrefacePart I: Value1. The Problem with Price? It's Not Value2. Value and Why It Matters3. The Theory of ValuePart II: Inos4. Knowledge and Innovation5. How Innovative Capabilities Enable Value Creation6. Allocating to Firms with a Unique Capability MixPart III: Clusters7. Birth and Growth of Clusters8. Cluster Convergence, Maturation, and Death9. Stable and Unstable ClustersPart IV: Moats10. The Value of Moats11. How Moats Affect Cost, Competition, and Customer Forces12. Managing Moats, for Value Creation Today and Wealth TomorrowPart V: The Economy13. The Economy as a Macroprocessing Network14. Monetary Shocks and Their Implications for the AllocatorPart VI: The Nature of Value15. The Nature of Value Allocation16. ConclusionNotesIndex