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

To: Moominoid who wrote (2746)	1/21/2001 11:54:44 PM
From: James Clarke	Read Replies (1) \| Respond to of 4690

Good argument David. Maybe I oversimplified my analysis, and you saw right through it. If you're thinking about earnings the way you are, its the value of the future growth of that float that you may be overlooking. Think of the difference between a no interest loan and a no-interest loan where the banker has agreed to lend you 10% more every year. Maybe your analysis has another way of capturing these economics - I'm sure there are other ways to value Berkshire. P/E (unless you make some MAJOR adjustments) is not one of them. Price/Earnings is not the way to compare investment opportunities. Price/Intrinsic Value will get much better results. Not to be misunderstood, I am not arguing that Berkshire is a screaming buy now. That would depend on what my number is and the assumptions behind that, which I don't think I stated. I'm talking purely theoretical methodology - how to value Berkshire.