logicalthought

Buffett and Gates at Columbia – The Markets Have Bottomed!

>>Warren Buffett told an audience of cheering Columbia University students last night that... stocks have bottomed out... Neither man would forecast the short run.<<

Of course they wouldn't forecast the short run, because they (or, at least, Buffet) knows damn well that even if 666 was "the bottom", no-revenue-growth markets can easily compress to 12x earnings, and a 12x multiple on the $63 current annualized S&P 500 would put the market in the 750s, which would be around 30% lower than where it is today. Buffet has also been saying that while business for his vast myriad of companies appears to have stopped getting worse, it still stinks and hasn't been getting better (i.e., "no revenue growth"). He also admits that he probably overpaid for his railroad, but there was a great column on Bloomberg by his recent biographer about this, which theorized that this was Warren's "legacy deal"-- something with "wide moats" that used up most of his cash, so that if anything happens to him, his successors won't be able to f*ck up his company too badly. And, as an added attraction, the pricing power of a railroad semi-monopoly provides a reasonable hedge against inflation. I'll bet you dollars-to-Dairy Queen that if Warren were 20 years younger, he would've offered enough less for that railroad that instead of accepting his offer in 15 minutes, it would've rejected it in five.

Largest Companies in the World

Bespoke guys:

How about doing this ranking by enterprise value, as the market cap alone can be a bit misleading when evaluating the "price" that the market puts on a company.