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  • Y Y Y - asking questions commented on Bram de Haas's article 16 hr ago
    Will Buffett Sell Wells Fargo?
    Warren Buffett (Trades, Portfolio) is one of Wells Fargo's (WFC) premiere shareholders by not only reputation, but by the size of Berkshire...
    View all 10 comments
    Y Y Y - asking questions 09-24 17:43
    • Bram,

      Thank you for your thoughts.

      It will be intersting to see what happens.

       
  • batbeer2 commented on Adam Brownlee's article 19 hr ago
    Determining the Best Growth Rates for a Discounted Cash Flow Model
    Warren Buffett (Trades, Portfolio) once likened valuation to Aesop’s fable, “a bird in the hand is worth two in the bush.” The trick though, he...
    View all 3 comments
    batbeer2 09-24 14:18
    • >> Deep net-nets might point to deep value but perhaps miss the strategy of quality companies at good to great prices.

      IMHO there is no such thing as a strategy of buying quality companies at good to great prices. Yes, some market participants do that, but it is not a strategy. There is only one strategy and it boils down to acquiring future excess cash flow at the lowest possible price.

      Many investors spend a significant amount of time figuring out the proper discount rate for stocks that are universally perceived to be safe (KO, PG, JNJ....).

      The day a stock is perceived to be not perfectly safe is the day:

      1) You don't need a spreadheet to prove it is cheap (AXP) and

      2) People call into question the quaitative aspects of the business.

      So now you're left with a choice.

      Either you spend a lot of time figuring out exactly what drives this business (the qualitative aspects) and finding out if and where the consensus is wrong or you stick with your model and apply that exclusively to a universe that is perceived to be perfecly safe.

      It is fair to say the latter option is mentally and emotionally less challenging. The aforementioned choice is exactly where investors who deserve excess returns and investors who want to believe the stock market is a place where you can find easy money part ways.

      Just some thoughts.


  • Adam Brownlee commented on Adam Brownlee's article 22 hr ago
    Determining the Best Growth Rates for a Discounted Cash Flow Model
    Warren Buffett (Trades, Portfolio) once likened valuation to Aesop’s fable, “a bird in the hand is worth two in the bush.” The trick though, he...
    View all 2 comments
    Adam Brownlee 09-24 12:12
    • I am guessing you might be using a net-net calculation and perhaps relative valuation? I say why not combine relative and intrinsic valuation for sure signs of value. Deep net-nets might point to deep value but perhaps miss the strategy of quality companies at good to great prices. Thoughts? Thanks for the comment.
  • Bram de Haas commented on Bram de Haas's article 09-24 07:52
    Will Buffett Sell Wells Fargo?
    Warren Buffett (Trades, Portfolio) is one of Wells Fargo's (WFC) premiere shareholders by not only reputation, but by the size of Berkshire...
    View all 9 comments
    Bram de Haas 09-24 08:52
    • @ Y Y Y



      O think he will still own it because on balance I believe he will favor holding (given current information). I could be wrong ofcourse. 

      I don't think Buffett is as protective as his reputation as you are giving him credit for. Ultimately his reputation depends on doing right by Berkshire shareholders and I think his reputation won't be tarnished long term as long as he supports (secretly in the beginning perhaps) a reorganisation at WFC. 



      Buffett has often held on to sticky situations and gave organisations time to fix small and large problems. 



      Im a subscriber to the economist and the article fit perfectly in the current hot trend of beating up on Buffett (easy because the value style didn't do so well over the past 5 years). When these kind of articles start appearing its all great for everyone who can still buy some Berkshire. I was amazed how they understated his track record by not adjusting for risk-free rate of return. 

       

       

       

2016-09-24

  • batbeer2 commented on Adam Brownlee's article 09-24 04:21
    Determining the Best Growth Rates for a Discounted Cash Flow Model
    Warren Buffett (Trades, Portfolio) once likened valuation to Aesop’s fable, “a bird in the hand is worth two in the bush.” The trick though, he...
    View all 1 comment
    batbeer2 09-24 05:21
    • Hi Adam, thanks for you sharing your thoughts.

      You say:

      >> Although it is still necessary to navigate the waters of cash flows and discount rates to devise a useful discounted cash flow model, this growth rate method puts us well on our way to figuring out how many birds are in the bush.

      I say:

      If you need to do a DCF, it is not cheap enough.

2016-09-23

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