Warren E. Buffett, 2005 1. What is the possible meaning of the changes in stock price for Berkshire Hathaway and Scottish Power plc on the day of the acquisition announcement? Specifically, what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp?
Answer: -
The possible meaning of the change of the stock is that the facts that are created in the deal had a positive effect on both the buyers ( BRK) and the sellers which are the mother company of Pacific( Scottish power), To find the 2.55 Billion gain of BRK on the market value equity that the intrinsic value of Pacific was good because it was within the range demonstrated in the calculations I have done:-…show more content… 7. Critically assess Buffett’s investment philosophy. Be prepared to identify points where you agree and disagree with him. Answer:-
The simple methods of investment strategy that Warren Buffett created are 8, I will discuss them in an individual bases, and write my honest opinion on each one of them. I agree with the first element that analyses the economical reality of investments. The majority of investors focus on the financial conditions and net profits, not considering the intangible assets of the company such as the management experience.
By taking a daily idea that every one of us use and converting this strategy to a complex one and developing it in the business path I agree with Warren Buffett. By analyzing the expected returns of an investment compared to the rate of return of using that same investment money in another investment, every single one of use thinks of that alternative in making any decision, from the simple things to life decisions.
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By looking in the historical data that would make Warren Buffett choice his investments, I agree with this element because it would give you a full look on the history of the company.
Buffet looks that the value per share of the industry, that would analyze the earn returns of the cost of capital, I agree with the Buffett in this point also because analyzing the size of performance of the size of the company wouldn’t reflect the real value of the
