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

To: Spekulatius who wrote (37916)	5/16/2010 8:24:45 PM
From: E_K_S	Respond to of 78484

Hi Spekulatius - My mistake on the Buffet rule. I should have stated "Net earnings" rather than "Revenues". *Long Term Debt should be less than 3 x Annual NET EARNINGS, not Revenues* I was informed by an SI lurker that "Warren's historic purchases indicate that on any given year the company should have sufficient Yearly NET EARNINGS to pay off all of its long-term debt within a three to four year EARNINGS period.". Using the 3x-4x Annual Net Earnings >= to LT Debt excludes even more of my stock candidates. A lot of my value companies still seem to have a much higher than acceptable amount of debt. It's definitely a metric I am going to pay more attention to in the future. Your suggestion to look at the EBITDA/Debt ratio is a good one too. EKS