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Review title: Either Buffett is an idiot or the authors of this book
Product review: Either Buffett is an idiot or the authors. In Financial Calculation # 6, the authors do a price analysis on Berkshire based on its equity growth. If you apply the formula to 10 years holding period versus 14 years you will get a different current price for the company. The current fair price of a company should not depend on your intended holding period. In that calculation using a 14 years of holding period they come up with $5499 as a fair price for Berkshire in 1986. If you change the holding period from 14 years to 40 years the fair price for Berkshire in 1986 (according to that formula) is $33,667. Now how stupid is that?Go figure.
