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I see no such potential???

You're sort of right, but sort of wrong, I think.

You can reverse engineer something Buffett probably thinks about GS stock price, but not its value now, its value 5 years from now. Presumably Buffett wouldn't have bothered getting the warrants as part of the deal unless he thought it probable that GS trades over $115 5 years from now.

So we CAN conservatively claim a probability of $115 or higher for GS 5 years from now, at least in Buffett's then opinion.

So at $75 per GS today, you could figure a probability of 50% return in 5 years or which is 9% CAGR.

Now Buffett's "margin of safety" was a pile of preferred paying 10%. The individual making the GS purchase now on this reasoning has no comparable kicker, seems to me.

R:
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