Warren Buffett’s Trick For Calculating Intrinsic Value

[@valuethoughtinvesting3563]

Thanks for sharing the valuation approach. There's a great section in the 1984 letter to shareholders where Buffett talks about this Bond-Equity valuation connection. It's in the Washington Public Power Supply System purchase notes.

[@dznRefuse]

It's somehow weird that Buffett says he is doing it this way but isn't using any Excel spreadsheet but a simple calculator. There must be a more simple, quick to use method to roughly estimate the value of a business, at least from the numbers side. Like Monisch Pabrai says: If you need Excel, it's a pass. I think the numbers game gets too much attention in the valuation space. If you could just calculate everything, everyone could be rich. I think Buffett's approach is more centered around an investment thesis, and then he quickly plays with a few numbers to see if it's cheap enough to buy. That would also fit more with his statements that he just reads 10k's all day.

[@melbournecrosbie]

"ENZ!" Love the Split Enz album cover.

[@maggieskelter6833]

Thanks for dropping by! hit up

[@theitalianinvestor262]

Thanks for the content! Very useful for every value investor!

[@richardhughes759]

Made bonds not boring mate, great video!

[@maggieskelter6833]

Thanks for dropping by! hit up

[@infinitejinpachi]

"If I explain terminal value this video will go on forever" lmao, was that on purpose?

[@hugomeza2910]

I notice You got rid of the quick ratio in your DCF spreadsheet. What was the reason you use to us it in your prior spreadsheets?

[@HamishHodder]

I never had the quick ratio! Always Current Ratio and Debt To Equity :)

[@hugomeza2910]

@@HamishHodder was there a particular reason why you were using the quick ratio in your DCF analysis? I have never seen anyone using it on a DCF analysis.

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[@hristolakov3563]

Thats very controversial. Terminal value + multiple slapped on the bond in the end. Where have you seen a bond with terminal value + market multiple? What am i missing? Buffett himself stated that he is not using Terminal values and market multiples for "exit".

[@rosennedev3678]

and I would bet 1 sandwich that Munger would lose interest in this 15 seconds after

[@alejandro1242]

@@rosennedev3678 Well, Charlie said he never saw Buffet doing a DCF and Warren Always says if an investment is not enough obvious and you need to do maths, is not a good investment.

[@hristolakov3563]

@@rosennedev3678 haha

[@Allen-L-Canada]

@@alejandro1242 Warrent is super high IQ guy, who doesn't need to do it on the paper.

[@davidgarza995]

So you basically just did discounted free cash flow accounting 101 thats the first thing you learn in finance along with WACC

[@maggieskelter6833]

Thanks for dropping by! hit up