Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
 Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd

The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
Answer this questionContinue to Shrewd'mThis note won't appear again
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
Unthreaded | Threaded | Whole Thread (7) |
Author: rnam ✭☼  😊 😞
Number: of 21941 
Subject: Damodaran breakeven revenue model
Date: 12/03/25 3:58 PM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 21
Prof. Damodaran has developed a model to estimate the breakeven revenue required to justify the current market cap of trillion dollar companies. The revenue growth rate required for the next 5 years is lowest for Aramco at 0.59% and BRK at 5.6%. It is highest for Tesla at 86%. Nvidia is at 26% and Apple 20%.

I will offer a simple model to reverse engineer from any given market capitalization, the revenues and profitability thresholds you have to meet, and allow you to come to your own conclusions.

The mechanics of the breakeven revenue process may make it seem like managers are bystanders in the process and that investing can be on autopilot, but they are not. In fact, when market capitalizations rise, and breakeven revenues run well ahead of current revenues, I would argue that management matters more than ever. Going back to the breakeven revenues that we computed for the twelve largest market cap companies in the world, I would make the case that management matters much less (if at all) in Aramco and Berkshire Hathway, where breakeven revenues are close to current revenues, and the investments needed to deliver those revenues have already been made, that at the companies that still have steep climbs ahead of them to get to breakeven revenues.

aswathdamodaran.substack.com - Trillion dollar market caps fairy

Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to rnam here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
Unthreaded | Threaded | Whole Thread (7) |


Announcements
Berkshire Hathaway FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Ticker or Board Name Author

Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community