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Scott Thompson

 
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  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Thanks for your comments.
    Apr 19, 2014. 03:53 PM | Likes Like |Link to Comment
  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Thank you.
    Apr 19, 2014. 12:48 PM | Likes Like |Link to Comment
  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Nigel, We will agree to disagree. All the best to you.
    Apr 18, 2014. 01:09 PM | Likes Like |Link to Comment
  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Nigel, I simply pointed you to view the financial statements of Coca-Cola (KO), and Exxon Mobil (http://bit.ly/tVVFv0). It's their methodology how they account for buybacks (not mine).
    Apr 18, 2014. 12:51 PM | Likes Like |Link to Comment
  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Thanks for your comments. Great questions.

    @johangud, You are certainly welcome to calculate it that way. However, using that method you’d get a per share valuation of only $7.68/share. Multiply that times “total shares outstanding” of 42,614,279 and your total intrinsic value of the entire business is only $327,181,046, instead of $453,099,571 ($10.63/share). A difference of $125.9 million. In his annual letters to shareholders, Warren Buffett focuses on the total valuation of the business.

    @Nigel, The financial statements of Coca-Cola (KO) and Exxon Mobil (http://bit.ly/tVVFv0), show how these business account for the cash outflow from buying back the shares. View financial statements for free at Morningstar.com or SEC.gov
    Regarding your 2nd question… future estimations of number of shares outstanding are based on solid 10-year history (or longer) of the business consistently buying back shares. My view is that this should only apply to stable, high-quality businesses like Coca-Cola (http://bit.ly/pjlgGH), Exxon Mobil (http://bit.ly/tVVFv0), and other similar stable businesses. It is not intended to apply to businesses with no financial history, or lower-quality businesses showing erratic, unpredictable, or inconsistent results. Use your best discretion. Hope this helps. Thanks.
    Apr 18, 2014. 12:15 PM | 1 Like Like |Link to Comment
  • Advanced Value Investing With Equity-Adjusted Valuations [View article]
    Agreed. Thank you.
    Apr 17, 2014. 10:38 PM | Likes Like |Link to Comment
  • Warren Buffett's 2-Column Valuation Method [View article]
    @cledrag: Warren Buffett explains his "Two-Column Valuation Method" investment process publicly on page 6 of his Berkshire Hathaway's (BRK.A, BRK.B) 2010 Annual Report. Buffett later republished his "Two-Column Method" on page 99 of his 2011 Annual Report, and on page 104 of his 2012 Annual Report.
    Aug 18, 2013. 10:06 AM | Likes Like |Link to Comment
  • Warren Buffett's 2-Column Valuation Method [View article]
    Thanks for your comments.

    @ Listner: Thank you for your kind feedback.

    @ Brian Grosso: Great points. The strength of Buffett's "Two-Column Method" is that there are NO assumptions. Whereas, a DCF analysis consists of many assumptions. Buffett's "Two-Column Valuation Method" is a rather tangible way to value a business, since is uses only existing data, and zero assumptions.

    I agree with you about incorporating debt into the valuation. Why do you think Buffett leaves it out of his "Two-Column Method?" It's obviously working well for him! :)

    Your question about debt is a good one. I'd add that "capital expenditures" on the cash flow statement should also be considered, as Buffett usually does not prefer high capital-intensive businesses (nor high-debt businesses). Thank you for your informed post!

    Scott Thompson
    http://bit.ly/1acftC9
    Jun 14, 2013. 04:46 PM | 1 Like Like |Link to Comment
  • Warren Buffett's 2-Column Valuation Method [View article]
    Thanks everyone for your valuable comments!

    @Buyandhold 2012: Agreed. Warren has mastered these abilities over time. At 82yrs young, with all his experience, he's at the top of his game!

    @Hewitt Heiserman: Great point. Just to kindly clarify, it's Buffett's model (not mine) that Warren published on page 6 of his 2010 BRK annual report. Yes, you're right, there's no doubt Berkshire's insurance float has definitely fueled Berkshire's success, with a very low cost (practically free?) source of investment capital.

    @Mercury Value: Thank you. I appreciate your encouragement.

    @sengle: Buffett said that if Berkshire can no longer earn greater than its cost of capital, only then would he consider Berkshire paying a dividend. However, according to Warren, Berkshire is still a growth company!

    Thanks everyone for your comments. Back to work.
    Jun 13, 2013. 02:45 PM | 4 Likes Like |Link to Comment
  • Excel Maritime Carriers: Trading Below Liquidation Value [View article]
    I've been stating EXM has been trading below liquidation value for several months. Since I'm more conservative in my analysis, my analysis shows EXM's tangible liquidation value to be: $262m divided by 84m shares outstanding = $3.16/shr liquidation value. Therefore, EXM's market price today of only $1.88/shr appears to be 40% less than its liquidation value! Scott Thompson
    Sep 10, 2011. 08:54 AM | Likes Like |Link to Comment
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