![]() ![]() When he started buying Apple in 2016, Apple’s average PE for the year in 2016 was 12, and it traded under 10 at points of the year. I think he added to that one this quarter, by the way. So, he was buying that under 10 times earnings. ![]() He bought the five Japanese trading houses at seven times earnings or 14% free cash flow yields. If you look at Occidental and Chevron, he bought those at double digit free cash flow yields. ![]() I can’t find any evidence that he wants to pay a fair price though. It’s true that Munger got him to shift away from cigar butts and towards higher quality businesses. It’s true he wants to buy wonderful companies. I think one of the misunderstandings about Warren Buffett is that it’s better to buy a wonderful company at a fair price than a fair company at a wonderful price. That is what happens when you buy cheap, by the way. John: JT was saying, Buffett buys cheap and ends up looking smart. During their latest episode of the VALUE: After Hours Podcast, Rotonti, Taylor, and Carlisle discuss Warren Buffett Buys Wonderful Companies Cheap. ![]()
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