Microsoft: Datacenters Now Last 25 Years; The Chips Inside Do Not
By Geneva Investor, Seeking Alpha
In the 1870s, an investor buying into an American railroad was buying two assets bundled into one security. The actual infrastructure (the roadbed, the cuttings, the bridges, and the tunnels) was close to permanent, and some of them are still working today. The rolling stock was not. Locomotives were worked and scrapped, and the railroads went back to buy more, decade after decade, whether traffic was booming or not.
My followers know I like these analogies because they force a question that pure multiples never do: when you own a capital-intensive business, which half of the capital are you actually buying?
