Warren Buffett is obviously an incredible investor with a track record across many decades. And although he has made countless good investments, that track record is largely due to several great investments such as Coca Cola, American Express and Washington Post. Value investing however, is not easy. Did you know that Buffett was down 25% […]
Tag: intrinsic value
Buffett explains intrinsic value
Question: How do you calculate intrinsic value? Buffett: Intrinsic value is terribly important but very fuzzy. We try to work with businesses where we have fairly high probability of knowing what the future will hold. If you own a gas pipeline, not much is going to go wrong. Maybe a competitor enters forcing you to […]
What is intrinsic value
“Book value tells you what has been put in; intrinsic business value estimates what can be taken out. “ Buffett: Chairman’s Letter – 1983 – Berkshire Hathaway, Inc. Link: http://www.berkshirehathaway.com/letters/1983.html Now let’s focus on two terms that I mentioned earlier and that you will encounter in future annual reports. Let’s start with intrinsic value, an all-important concept that […]