Munger on EBITDA

munger 150x150 Munger on EBITDAThis article originally appeared on The DIV-Net May 9 2009.

Charlie Munger though a pioneer in value investing and the four filters is a fairly raw character and has a way of getting to the point in a sometimes abrupt manner. Charlie did just this when he referred to EBITDA as “bullsh*t earnings” at the Berkshire Hathaway meetings in 2003.

EBITDA = Earnings before interest taxes depreciation, and amortisation.

What is the Problem with EBITDA?

Well let me give an example:
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  • Company A earns $1M and pays $.75M in interest, taxes, & depreciation.

The Four Filters of Warren Buffett and Charlie Munger (Review)

buffet munger 150x150 The Four Filters of Warren Buffett and Charlie Munger (Review)

As investors we are well advised to study the styles of those that are successful at our craft in the hopes that we may emulate them.  Two of the most studied characters of recent memory are Warren Buffett and Charlie Munger.  With their unparalleled returns the two have achieved almost pop culture celebrity status.
bullet The Four Filters of Warren Buffett and Charlie Munger (Review) Read More...
 
   

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