Now this goes back squarely into market efficiency, because think about this for just a minute and this is why market efficiency is so important. If markets were textbook efficient and remember that market efficiency, that extreme hypothesis that we don't expect to be true. If markets were textbook efficient, then all this analysis that were doing wouldn't make any sense to do it, because you would say, look the market price is correct. It is incorporating all the information that we have about Hilton about the competitors, about the future, about the past. And so it is trading at the right price. Well, if you believe that there wouldn't be any analysis, so remember that that's why market efficiency is an extreme hypothesis. We always expect some prices to be a little bit out of whack, or a lot out of whack, which is what analysts are always trying to find. Which is what portfolio manager is always trying to find. So now we say, well, Hilton is trading at 10.5, we think that it should be trading at 17. But the next question you should be asking which is very important is, may be the market is right and my analysis is wrong. You always have to be humble enough to admit that possibility. You always have to say, well, what, if everybody else is right and I'm wrong, and that is precisely what in this case is called a value trap. A value trap, and let me give you a quick example, is basically stock that seems to be cheap, but it's not. It's cheap because it deserves to be cheap, so I'm not saying that this is a case of Hilton. But we have to be open to the possibility that Hilton is training at 10.5, which is what people are willing to trade Hilton at that price. We think that it should be priced at around 17, maybe it's us that were wrong, and if we by Hilton because we think that is cheap, maybe we fall into these value trap. Meaning maybe Hilton is price at a lower multiple because it deserves to be priced at a lower multiple. Never stop this type of analysis without asking the question. What if I'm wrong because maybe the market is right. Maybe the joint in formation and analysis of all those people out there is better than yours. And maybe the market is correcting valuing your company higher or lower than other companies higher or lower than it was in the past or higher or lower than what you think is worth. Always be open to that possibility, because that humility is critical to avoid mistakes. But that is a critical part of any evaluation method that you use is opening up the possibility that your analysis may be misleading, your conclusion may be misleading and the market price happens to be correct. Of course, it doesn't have to be the case, maybe it's the other way around. This is what Warren Buffett does many times. He looks at a company, he concludes that the company is worth more than people are paying for and he buys and he tends to be right. Makes mistakes like anybody else, but in the long term he happened to be right a lot, so to speak. So the important thing here is just if you wanted the end of the story of Hilton and this is just incidental. But I mentioned this so that you avoid following into another trap, which is what happened with Hilton after the time that we analyze it is that eventually was bought by Blackstone private equity fund at 47.5. And that is what happened with Hilton. So at the time of our analysis it was trading at 10.5 and about seven years later, Blackstone actually paid 47, a lot more than the 10.5%. Now you might look at that graph and conclude, hey, we were right. Hilton was cheap, maybe, but also there might have been other reasons why Hilton went up overtime. So the reason I'm putting that chart is to avoid your conclusion that all analysis was right, and Hilton was cheap. Maybe it was, maybe it's not. We didn't did that deeper into the analysis to conclude whether Hilton was cheaper or not. That is exactly what an analyst with a lot more time with a lot more resources and with a lot more knowledge would actually have to do. Never conclude cheap or expensive just by comparing those two multiples.
