Subject: Re: What recent Berkshire security do you like best_QM
I still remember a long discussion in the mid-2000's with a guy who insisted that AAPL was too expensive above 100 ...
If it's a good stock, it's a good stock at the current price. If it's not a good stock it doesn't matter how cheap it is.

The problem is that you've used the word "if" there twice. It's certainly true, but without either (a) a crystal ball to know in advance which tiny few firms have a super bright future, or (b) a margin of safety sufficient to cover the range of plausible outcomes, you're asking for a world of hurt.

It's fine for a post cite how smart it was to buy Apple back when: it would have been, with hindsight. But one must also realize that such a purchase involved intuiting that they were about to introduce the most successful product in all human history. (Or for that matter consider a Bogle-type post suggesting that the S&P was a brilliant purchase citing its fabulous returns since then, anticipating that it would soon be three times as expensive as its prior historical average: sure, knowing that in advance, it would have been a great pick. We could equally have seen valuation levels like the early 1980s, though.)

You tell me which few companies will grow 100-fold in the next decade, and I promise not to quibble about their current valuations!

Till then, I'll stick with stocks where I'm pretty-darned-sure I'll be getting at least €1/share/year on average in real owner earnings 5-10 years from now for every €10 of share price today.


On the subject of the points raised in the thread, current market conditions do offer pretty slim pickings for those that insist on a good value for money. The best bets seem to be in the scratch and dent bin: a firm with an obvious problem, but a good deal if you conclude the problem is probably not permanent or fatal. (there's that word "if" again).

Random thought from the damaged goods department: Brown-Forman (Jack Daniel's etc) is trading at 1/3 of where it was trading a while back, at $27.46. This is about their fourth year of flat sales per share. Now, maybe booze will not be the business it once was, but also maybe it won't totally go away. Their products might one day be for sale again in Canada. A doubling in share price in the next few years would not be surprising to me, and there's a 3.3% dividend yield to amuse you in the mean time.

Jim