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Stocks B / Berkshire Hathaway
URL: http://boards.fool.com/tilsons-iv-estimate-is-180k-seems-a-little-more-30430020.aspx
Subject: Re: Updated Tilson Presentation	Date: 12/13/2012 11:26 AM
Author: mungofitch	Number: 196896 of 202057
Tilson's IV estimate is $180K Seems a little more reasonable than his figures usually do. For earnings, he pencils in $8000 pretax plus $600 cyclically adjusted underwriting profit, total $8600. FWIW that's 13.5% higher than my $7236 pretax plus $344, total $7580. He used a figure for underwriting profit that implies -1.39% cost of float versus my -0.8%. The derivation of my figures is described here boards.fool.com/valuation-agrave-la-tilson-30414581.aspx Using my earnings and his multiples you get a value of $173,473. He actually uses a higher earnings multiple than mine: 8x pretax earnings rather than the 9x I use. That's extremely conservative on his part. A P/E of 12.3x is pretty darned good for that set of businesses. On the other hand, mine is more conservative mainly due to placing a 20% haircut on investments per share due to the perpetual drag of cash. It's pretty much impossible these days to come up with a value figure under $150,000. Jim
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