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Strategies & Market Trends : Buffettology

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To: Michael Burry who wrote (226)	8/2/1998 5:09:00 PM
From: Axel Gunderson	Read Replies (2) of 4691

To All: Of all the books written on Buffett and his methods, I thought that Buffettology was the least useful and the least believable. I sincerely doubt that Buffett uses the method described, and suspect that at most he used it as a teaching method. If nothing else, the attention paid to market valuations is in conflict with Buffett's lack of interest in exiting his positions. The use of the implied return based on ROE has been around for years, and is in fact one of the techniques taught by the NAIC. As I recall (and it has been years so please don't hold it against me if creeping senility has taken its toll) the NAIC even used KO as an example of the limitations of the system. I did download Michael's spreadsheet (beautiful job, Michael) but view the outputs with some scepticism. It is my belief that the Hagstrom book presents a more credible view of how Buffett might be making determinations of valuation, and that the Lowenstein book gives the most credible insight into Buffett's internal forces. I recommend both, but especially the Hagstrom book for those who wish to develop a similar checklist. Axel

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