At the end of every annual report just past the 15 principles you get the section of INTRINSIC VALUE. On the 2010 annual report it's located on page 101:
Two people looking at the same set of facts, moreover – and this would apply even to Charlie and me – will
almost inevitably come up with at least slightly different intrinsic value figures. That is one reason we never give you our
estimates of intrinsic value. What our annual reports do supply, though, are the facts that we ourselves use to calculate this
Meanwhile, we regularly report our per-share book value, an easily calculable number, though one of limited use. The
limitations do not arise from our holdings of marketable securities, which are carried on our books at their current prices. Rather
the inadequacies of book value have to do with the companies we control, whose values as stated on our books may be far
different from their intrinsic values.
The disparity can go in either direction. For example, in 1964 we could state with certitude that Berkshire’s per-share book
value was $19.46. However, that figure considerably overstated the company’s intrinsic value, since all of the company’s
resources were tied up in a sub-profitable textile business. Our textile assets had neither going-concern nor liquidation values
equal to their carrying values. Today, however, Berkshire’s situation is reversed: Now, our book value far understates
Berkshire’s intrinsic value, a point true because many of the businesses we control are worth much more than their carrying
Inadequate though they are in telling the story, we give you Berkshire’s book-value figures because they today serve as a
rough, albeit significantly understated, tracking measure for Berkshire’s intrinsic value. In other words, the percentage change in
book value in any given year is likely to be reasonably close to that year’s change in intrinsic value.
This is exactly what he said and people can interpret it as they see fit. I know how I interpret it.
What valuation idea? I'll take all your dollars and pay you 90 cents, cool? I don't expect you to agree. The fact I'm willing to exchange every dollar you've got for 90 cents simply contains no information about BRK's valuation whatsoever.
the "issues are" :
that republitards cannot be trusted with american money;
that nothing the republitards are saying would be recognised by either teddy roosevelt or reagan as "republican";
that "enemies foreign and domestic" belong at gitmo, and the republitards have proven they meet that description.
Doesn't matter. jad is valuing Geico by its earnings.
Though we could get Todd biting his tail by claiming that his huge new goodwill number for Geico knocks down Geico's ROE and chokes off growth.
I imagine jad would be fine with it if you wanted to restate the Geico goodwill at 14B, bump up Berkshire's book value accordingly, then pay out of book value for Geico at its new higher book value including that giant goodwill number.
Yes, I've played unfair by saying something you can't follow. Life can be hard.