Letters by Topic
Letters on Book Value vs. Intrinsic Value
Book value (accounting net worth) vs. intrinsic value (true economic worth); Buffett increasingly emphasizes intrinsic value as the only meaningful metric.
1970·First acknowledgment of book value's limitations
We use book value as a convenient proxy for intrinsic value, though it is an imperfect one.
2012·Candid acknowledgment that the gap has widened significantly
Book value is now a significantly understating figure for Berkshire's intrinsic value.
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Book Value vs. Intrinsic Value is one of the ideas behind the ValueOS tools. See it applied to real companies.