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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (2745)	1/21/2001 2:05:25 AM
From: Moominoid	Read Replies (1) \| Respond to of 4690

From what I understood Buffett to say float is like a cheap or negative cost loan. The cost or revenue from obtaining float is part of operating earnings. There is no need that I see to "value" float. Then there are the investments bought with the float and you need to try to measure the long-term earnings from these investments. For stocks this is best done with look-through earnings as Buffett himself says, so year to year fluctuations in market prices don't obscure things. Sure Buffett does things in a tax effective way but again there is no mystery there. The capital gains taxes on a stock like KO are pushed off into the indefinite future but KO pays as much corporation tax as BRK would have to if KO was a fully-owned subsidiary of BRK. And BRK pays 15% tax on any dvidends paid out so in fact more tax. I just see myself trying to value BRK in the same way that Buffett lays out himself. How can P/E be irrelevant if you want to decide between buying BRK stock or another investment? Of course you have to try to measure total earnings as well as possible and look at future earnings growth and risk. But it is part of the total picture. You want to buy a business at the right price as Buffett says. Berkshire might be a great business but you don't want to buy it if the price is too high. David

To: James Clarke who wrote (2745)	1/21/2001 2:17:59 AM
From: Michael Burry	2 Recommendations Read Replies (5) \| Respond to of 4690

Just dropping in for some help. I am looking for a quote where Buffett makes a comment saying that there is disadvantage in his current vehicle's corporate structure with regards to securities investment, and suggests his old partnership structure was much more advantageous in terms of securities investment. I read this comment somewhere within the last year I think, and I don't believe it was in an annual letter. Ring any bells for anyone here? Thanks in advance. Best, Mike