Anyone have any calculations about the new BV? :)
I don't think it really changes. Cash down, debt up, assets up...balancing.It's likely that, as with most purchases, the purchase price will all get added to book (and cash subtracted from book), allocated in various proportions to fixed assets, goodwill etc.The main thing to keep in mind that some moderate portion of the purchase price will get amortized over time, causing an economically meaningless hit to earnings.Jim
Thanks.... So how about intrinsic value changes?Jim, you are soooo helpful!jan:)
Jim, your generous thoughtful,polite analysis, insight and contributions to this board and advice to individual members are greatly appreciated by me and I'm sure countless others. I always look forward to your comments...daily! I profit greatly. I don't know if you realize this or not but thought I would express what I'm sure many others are thinking. I'm more concerned about YOUR health and succession plans than I am about Charley or Warren's! You know my situation and when I expire, my wife knows whom to look to for advice. Thank you.Regards,tairbear
...contributions to this board ... greatly appreciated...You're too kind.My general motto is "never at a loss for an opinion". Runs in the family.I'm more concerned about YOUR health and succession plans...If anybody cares, my health is excellent, and I have a way to go before I reach what one would consider normal retirement age.The extent of my estate planning to date:Notwithstanding the motto above, I think for my tombstone I want "Spending every dime / for a wonderful time".(Irving Berlin lyric from Puttin' on the Ritz)Words to live by!Jim
Thanks.... So how about intrinsic value changes?Well, that depends purely on whether you think purchasing all the sharesof Precision Castparts were worth more or less than the $32.20bn paid for them.Presumably Mr Buffett thinks they are worth more. I am disinclined to gainsay his opinion.Since the current earnings yield is not particularly exciting, he evidently believes that it is almost certain that real earnings will be higher in future and last for a very long time.(2005 earnings per share about $2.57, 2015 earnings per share about $13.40...)There are various ways to estimate intrinsic value, which will make the firm look more or less valuable as a result of the transaction, but really it all comes down to whether Precision Castparts was worth more or less than the cash paid.That in turn depends upon the future earnings growth question, so all IV estimation methods will miss the point, at least for a while until we learn more about the earnings trajectory.It's likely that, as with most purchases, the purchase price will all get added tobook (and cash subtracted from book), allocated in various proportions to fixed assets, goodwill etc.The main thing to keep in mind that some moderate portion of the purchase pricewill get amortized over time, causing an economically meaningless hit to earnings.Since it's such an important and impenetrable subject, it might be worth re-reading some notes on purchase accounting.http://boards.fool.com/and-what-are-the-categories-of-econom...I keep re-reading that stuff. It helps a little, but not as much as I'd like.Jim
I'm very happy to hear that your health is excellent, Jim. As for tombstones, I like what I've picked, borrowed from from Herbalife (my wife hates it!):"Lose Weight Now.... Ask Me How"
As for tombstones, I like what I've picked, borrowed from from Herbalife (my wife hates it!):"Lose Weight Now.... Ask Me How" I love it!A nice mix of pop skewering, and the classic memento mori.Our family tomb readsMISCE STULTITIAM CONSILIIS BREVEM DVLCE EST DESIPERE IN LOCO — Horace (56-08 BC)"Mix a little foolishness with your wisdom: it's good to be silly at the right moment."No prize for guessing who picked it.Jim"A gentleman need not know Latin, but should at least have forgotten it"
I know this is so far off topic, but I think it's amazing that we can find humor, even in our own deaths....I hope to go out smiling and making others smile as well, long after I'm gone. My favorite tombstone that I actually read was "I Told You I Was Sick!" Sorry for the diversion, but I am terminal and I truly enjoy spreading cheer and I hope others enjoy my gallows humor :) But please, let's not make a long thread out of something sooo off topic! I do not want to disservice this otherwise amazingly informative board....tairhttps://www.google.com/search?q=tombstone+humor&biw=1093...
Sorry for the diversion, but I am terminal ...As are we all, Tairbair, as are we all.May your perhaps different degree of certainty about mere timing have no effect on enjoying the ride as much as possible under the circumstances, which is all any of us can do.You only live once, and that's an upper limit. Some people don't manage near that much.It is indeed that the humorous or barbed epitaph has gone out of style."Here lies Lester Moore. Four slugs from a 44, no Les, no more."He was a Wells Fargo agent, so it's not entirely off topic.My late business partner was, like me, a programmer by trade and by inclination.His tombstone says ABEND. Most people probably think it's Latin or something.At the funeral they played "Always Look on the Bright Side of Life".Jim
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