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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
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