Warren Buffett may have just changed his investing philosophy

For nearly 30 years, Warren Buffett has used book value as the benchmark for the value Berkshire Hathaway has created each year. In hisWarren Buffett swaps benchmarks for the first time in more than half a century.

The group’s equity investments are required to be valued at market prices but the operating businesses it owns are required by accounting standards to be valued at their book value, which he said was far below their "current value." When Buffett started investing back in the 1960s, book values for companies whose balance sheets were dominated by physical, tangible assets were a better guide to the realisable value of a company than they are today, when intangibles like brands values and intellectual property have become drivers.

Between 1965 and 2018 the annual percentage increase in Berkshire’s book value per share was 18.7 per cent. Over the same period the gain in its share price was 20.5 per cent. "That combination causes the book-value scorecard to become increasingly out of touch with economic reality," he wrote.

Australia Latest News, Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

'I was wrong in a couple of ways': The investing mistake Warren Buffett madeEven legendary investors like Warren Buffett can make mistakes.
Source: theage - 🏆 8. / 77 Read more »

'I was wrong in a couple of ways': The investing mistake Warren Buffett madeEven legendary investors like Warren Buffett can make mistakes.
Source: smh - 🏆 6. / 80 Read more »

'Beyond arrogance': Warren Buffett takes veiled swipe at Trump in annual letterHis annual letter to investors is always eagerly anticipated, and Warren Buffett's 2019 edition did not disappoint. But we got Trump because: the others ignored ex factory workers, Washingtonians just swan around the swamp, earlier Presidents got USA into wars, Hilary’s hubris and her playing identity politics, lack of talent and too much talk and no action.
Source: smh - 🏆 6. / 80 Read more »

'I was wrong in a couple of ways': The investing mistake Warren Buffett madeEven legendary investors like Warren Buffett can make mistakes.
Source: smh - 🏆 6. / 80 Read more »

'I was wrong in a couple of ways': The investing mistake Warren Buffett madeEven legendary investors like Warren Buffett can make mistakes.
Source: theage - 🏆 8. / 77 Read more »

'Beyond arrogance': Warren Buffett takes veiled swipe at Trump in annual letterHis annual letter to investors is always eagerly anticipated, and Warren Buffett's 2019 edition did not disappoint. But we got Trump because: the others ignored ex factory workers, Washingtonians just swan around the swamp, earlier Presidents got USA into wars, Hilary’s hubris and her playing identity politics, lack of talent and too much talk and no action.
Source: smh - 🏆 6. / 80 Read more »

Facebook attacked over claims it knows when users are having their periodsSeveral health apps are reportedly sending sensitive user data to Facebook. So, is it happening in Australia? from TheFeedSBS
Source: SBSNews - 🏆 3. / 89 Read more »

Facebook under fire over claims it knows when users are having their periodsSeveral apps including period tracker Flo Health are reportedly sending sensitive user data to Facebook, prompting an investigation by NY state agencies. Period.. Not me There's already a hashtag PerpWalkForZuck. Perhaps PervWalkForZuck is now apt. Seriously though, when will Facebook, described in a report by a U.K. parliamentary committee as a 'DigitalGangster,' be held accountable? It's not a platform, it's a corporation. Rein it in.
Source: abcnews - 🏆 5. / 83 Read more »

Apple is having its very own Nokia momentSamsung's foldable phone gives the company a real shot at toppling Apple as the king of cool. | ANALYSIS Nokia? Or blackberry?
Source: theage - 🏆 8. / 77 Read more »