Your valuation method would give a buy at $51 if you include the 2008 results in, instead of $60 previously. How do you rectify and account for this situation and assure which is the appropriate value. Does that mean you have bought at a premium because the fcf in 2008 has decreased?

Dan – I like Morningstar’s premium service as a starting point for research.

Berkshire actually bought more Posco shares in 2008 at about $ 400 a share. Be aware the PKX ADRs represent a quarter of a share.

Yeah I’m sorry to post this here although it has nothing really to do with the JNJ Sell, Except that I’m thinking of buying some for myself soon =) (Joe, please feel free to move this to where-ever you seem appropriate.)

The recent (and by recent I mean few months) turmoil really pushed me into searching stocks for myself, apart from JNJ, which came to my attention from reading about it here or in Buffet related articles, I find it really hard to find stocks by looking at what I really want. What I mean is that I’m dying to find a stock screener that actually checks FCF, CROIC, or any *valuable* figures. any suggestions? and please add if you can the criteria you usually use.

Thanks a lot,

Dan.

Yeah I’m sorry to post this here although it has nothing really to do with the JNJ Sell, Except that I’m thinking of buying some for myself soon =) (Joe, please feel free to move this to where-ever you seem appropriate.)

The recent (and by recent I mean few months) turmoil really pushed me into searching stocks for myself, apart from JNJ, which came to my attention from reading about it here or in Buffet related articles, I find it really hard to find stocks by looking at what I really want. What I mean is that I’m dying to find a stock screener that actually checks FCF, CROIC, or any *valuable* figures. any suggestions? and please add if you can the criteria you usually use.

Thanks a lot,

Dan.

Socrates is a man.

All men are mortal.

Therefore, Socrates is mortal.

Later in Logic class I learned to build proofs that where several pages long and very impressive looking in their complexity. I would spend hours verifying their validity and when they worked they were a beautiful thing. However, the huge lesson that I took away from all my studies was a very simple one, that you could have a beautiful valid argument which was also utterly false, simply because you failed to notice that the Socrates in question was not the famous philosopher, but your girlfriend’s cat.

“Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas.”

JNJ and PG might be affected negatively in the near future due to high inflation and poor currency conversions. COP was a loss and although oil prices may eventually go higher, they are not going to go back to 2008 levels within the next year. Sure he could sell POSCO but there is a high probability that the shares will go up if there is higher inflation and he still hasn’t lost on that position.

Notice that he did not sell out entirely on these positions and still feels comfortable with holding them. He may even purchase additional shares as more capital becomes available for him to invest.

It’s a no brainer — he found more attractive places to put the dough.

Buffett thinks in terms of opportunity cost.

D.

I’m sure that the question will come up at this year’s annual meeting, though I doubt he’ll talk about it as he doesn’t like to discuss current holdings. We’ll know for certain in a few months.