When you're valuing the companies and you discount back the future earnings, you talk about how many years out do you generally go? And if you don't go out a general number of years, how do you arrive at that time period? Well, that's that's a very good

question, and it's it's I mean it's the heart of investing or buying businesses, which we regard as the same thing, but and it is the framework in which we operate. I mean, we are trying to look at businesses in terms of what kind of

cash can they produce if we're buying all of them, or will they produce if we're buying part of them? And there's a difference. Uh, and then at what discount rate do we do we bring it back? And and I think your question was how far out do

we look at all that despite the fact that we can define that in in a very kind of simple and direct equation, you know, we are we we've never actually sat down and and and written out a set of numbers that uh to relate that equation. We do it in our heads in a way.

Uh, obviously I mean that's that's what it's all about, but there's no piece of paper uh and and and we never there never was a piece of paper that shows what our calculation on H-burg or See's Candy or the Buffalo News was in that

respect. Uh, so it would be attaching a little more scientific uh quality to our analysis than there really is if I gave you some gobbledygook about, well, we do it for 18 years and take a terminal value on and do all of this. Uh, we are

sitting at the in the office thinking about that question with each business or each investment and we we have discount rates in in a general way in mind but uh we really like the decision to be obvious enough to us that it doesn't require making a detailed

calculation and and uh uh it's the framework but it's not applied in the sense that we actually fill in all the variables is that a fair way stting at yeah Berkshire is is is being run the way Thomas Hunt Morgan the great Nobel laureate ran the

biology department at Caltech he banned the Frieden calculator which was the computer of that era and people said how can you do this every place else in Caltech we have Frieden calculators going everywhere and he said well we're picking up these great nuggets of gold just by organized

common sense and resources are short and we're not going to resort to any damn placer mining as long as we can pick up these major aggregations of gold that's the way Berkshire works and somebody once topped our staffing papers on some acquisition and of course not

only did we not have any staffing papers we didn't have any staff I don't know we have such a fingers and toes style around here halfway we just sort of count and yeah the I've never seen you know we Warren talks about these discounted cash flows

I've never seen him do one yeah if it is there are some things you only do in private Charlie if it isn't perfectly obvious that it's going to work out well if you do the calculation he tends to go on to the next idea yeah it it sort of AO it is

true you don't if you have to if you have to actually do it on with pencil and paper it's too close to think about I mean it ought to just kind of scream at you that you've got this huge margin of safety I mentioned the three ideas

the three ideas I should elaborate on one is that the think of yourself think of investing as owning a business and not and not buying something that's wiggles around in price and and and uh the second one is your attitude which ties in with that the attitude toward

the market that's covered in chapter 8 and if you have the proper attitude toward market movements it's an enormous help in securities and the final chapter is on the margin of safety which which means uh don't try and drive a 9,800 lb

truck over a bridge that says you know capacity 10,000 lbs but go down the road a little bit and find one that says capacity 15,000 lbs

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