Warren Buffett (Trades, Portfolio): Intrinsic value can only be counted or gained in retrospect, but intrinsic value to our definition would be cash generated between now and judgment day discounted at interest rate that seems to appreciate at the time and that’s very enormous over a 40-year period. if you pick out 10 years then you’re back to may 2007. we had some unpleasant things coming up. We’ve probably grown at 10%, and that’s going to be tough, maybe impossible to achieve if we continue in this interest rate environment.
if I could pick only one statistic to ask you about the future I would not ask about GDP, who was going to be president; i would ask you what the interest rate was going to be in the next 20 years on average. If you assume present interest rates, the average number over 20 years, likely I would say it’s difficult to get 10% [growth] but if any interest rate I would say it might be aspirational or might be doable. You would say we can’t continue low interest rates for a long time. I would say to look at Japan where we didn’t see how their interest rates could be sustained.
The chances of getting a terrible deal at Berkshire Hathway (BRK.A, Financial)(BRK.B, Financial) are probably low. The chances of getting sensational deal are also low. Best guess would be in the 10% range, but that assumes some higher interest rates, not dramatically but somewhat higher in the next 10 went years than the last seven years.
Warren Buffett Says Expected Berkshire Growth Rate Lower in Future
Buffett commented on expectations at the Berkshire shareholder meeting Saturday
May 06, 2017
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