Question: What valuation metrics do you use? Buffett: The appropriate multiple for a business compared to the S&P 500 depends on its return on equity and return on incremental invested capital. I wouldn’t look at a single valuation metric like relative P/E ratio. I don’t think price-to-earnings, price-to-book or price-to-sales ratios tell you very much. […]
Tag: stock valuation
Buffett quotes on stock valuation
How we value a business is what the game is all about. If you cannot value a business, you cannot value a stock. Source: BRK Annual Meeting 2001