This is a bit stale but hopefully John is still following like non-planted land. Warren Buffett has never spelled out his formula but he has alluded to it several times. Thousands of folks have been studying his public statements, frame by frame, like the Zapruder film. The gist of what he has said is on the net and can be found with a few minutes time using Google. I think you'd be better off studying Ben Graham's value formula which is published specifically. To get the most value out of this value formula, you should read the book, "The Intelligent Investor" to learn how he arrived at the formula. Intrinsic Value = (EPS x (8.5+2g) x 4.4)/(20yr Corp Bond) Here is a wiki page on it: https://en.wikipedia.org/wiki/Benjamin_Graham_formula Remember: Buffett learned from Ben Graham. He even named his son after him.
i have one concern. Read the way of warren buffett, there is stated how he calculate owner earnings: net income+ amortisation +/- other noncash charges - capex +/- changes in working capital. im concernd about noncash charges- it can be found in cash flow statement. Buffett say they take some of noncash charges in the account, but i have no ideal which. I dont think for example stock based compensation and pension plan should be included. do u have any idea Cheers, Janez
The calculation of the intrinsic value formula of the stock is done by dividing the value of the business by the number of outstanding shares of the company in the market.
