Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (74083)	10/27/2023 5:08:15 PM
From: Harshu Vyas	Respond to of 78525

And I stand corrected. Very interesting - I wasn't familiar with this. Thanks, Paul.

To: Paul Senior who wrote (74083)	10/27/2023 7:50:44 PM
From: petal	1 Recommendation Recommended By William Cloutier Respond to of 78525

."I think everyone on this thread understands that Buffett never "overpaid" for any business..." If we're now talking about hindsight mistakes, ol' Buffy –– like all the rest of us –– sometimes overpays for businesses. Whether it's the "original sin" of Berk itself (still can't believe that he bought a cigar butt like that for keeps.......), or Gen Re, or Dexster Shoe (both the latter with bought with BRK stock...), etc. etc. We're all hewmenns eh

To: Paul Senior who wrote (74083)	10/28/2023 3:16:38 AM
From: bruwin	1 Recommendation Recommended By Sisyphus Read Replies (1) \| Respond to of 78525

Precision Castparts PCC). I have to wonder if its P/E was a major consideration when Buffett decided to buy PCC. The latest set of PCC's financials that I could find was for 2014 (Copy link into browser) :- https://web.archive.org/web/20140916034650/http://www.precast.com/web/user_content/files/743553_002_precision_castparts_corp_bmk1.pdf According to David Clark, Buffett used his "Equity Bond" strategy when considering the preferred Share Price of a company relative to his calculated "Equity Bond". The formula is :- Pretax Income/No. of Shares/10 Yr AAA Corporate Bond Rate. In 2014 we saw :- PCC's Pretax Income = 2601 No. of Shares = 146.6 10 AAA Corp. Bond Rate = +/-4% (?) So 2601/146.6/0.04 = ~$440/share which was very much greater than PCC's average share price at the time of around $180/share. So at $180 it would have been regarded as a favourable purchase price. I suspect that the situation would most likely not have been that much different in 2016, but 2014 was the latest I could find.