Message Font: Serif | Sans-Serif
No. of Recommendations: 0
If there is a value premium, there will also be a price premium.
It may be too high, or too low, or this late in Buffet's career it may be very slight and may even turn negative at some point, but it will be there.

We agree that Buffett is valuable, so there is a value premium, but does that mean there has to be a price premium? I would say no, since value and price do not go hand in hand, at least not in the short term. Restaurant owners are not always prepared to pay more for a great chef, even if he adds value to the buffet.

By saying that the price premium can be negative at some point, you seem to be acknowledging this point. In the long run, we agree that if there is a value premium, it will show up in a price premium - this is the principle behind value investing.

Regards, DTM
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.