The following is an edited partial transcript of Alice Schroeder’s speech/lecture during the Value Investing Conference 2008 held at the Darden School of Business, University of Virginia.
Question from an Audience: I'm kind of interested in the scratch notes that you were talking about ... If someone who was very quantitatively-oriented and knows excel looked at that and put it into a model, do you think he could understand what's going on inside Warren's head when he's trying to value a company, and actually replicate that?
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Alice Schroeder: There's a saying, let me call it to mind... I think it's from the Intelligent Investor: “The purpose of the margin of safety is to render forecast unnecessary.” |
That's what it is.
That's all this is. And the difference from a model is that it would not add the quarters up, and it would not project anything into the future, nothing. In other words he looked at what had been reported, and he said they've earned a million in sales; they've earned this many thousands. I want this much. They earned this, I want this, can they do it? Yes/no? That's the decision.
There's a saying, let me call it to mind... I think it's from the Intelligent Investor: “The purpose of the margin of safety is to render forecast unnecessary.”
For those interested, you can see a cut version of the Alice Schroeder video here.
I've read it from part 1 to part 8. It's very informative. thank you.
ReplyDeleteWow, thanks for reading them. Alice Schroeder's talk was really inspiring--too inspiring I felt I had to transcribe and share the essential portions of it, lol! And btw, also thanks for being a "business-minded follower" =D
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