ASÍ CALCULA WARREN BUFFET EL VALOR INTRÍNSECO DE UNA ACCIÓN

Summary

This script offers an insightful look into Warren Buffett's investment philosophy, focusing on intrinsic value calculation. It explains how to assess a business's worth by considering its annual cash generation and comparing it to the market value. The script simplifies complex investment concepts, such as discounted cash flow analysis, and emphasizes the importance of a margin of safety to mitigate risk. It encourages investors to think long-term and make informed decisions based on a company's future cash flow potential.

Takeaways

• 😀 Investing is about buying an asset to get more money in the future, and the value of an investment is determined by the cash it will generate over time.
• 💰 Warren Buffett's investment strategy involves calculating the intrinsic value of a business by estimating the total cash it would generate in the future, discounted back to the present value.
• 📈 The market capitalization of a business is found by multiplying the number of shares by the current share price, and it's compared to the calculated intrinsic value to determine if the business is overvalued or undervalued.
• 🤔 The intrinsic value of a business is the sum of all cash it would generate until the 'day of judgment', discounted at an appropriate rate to reflect its present value.
• 🏭 Understanding the free cash flow of a business is crucial, as it represents the cash that owners could theoretically keep each year.
• 📊 To calculate the intrinsic value, one must estimate the growth rate of the business's free cash flow over the next 10 years, which will significantly impact the valuation.
• 🔢 Historical growth rates, industry standards, and future growth drivers should be considered when estimating the business's growth rate.
• 🌐 The terminal value is the estimated selling price of the business after a certain period, calculated by multiplying the final year's free cash flow by a multiple based on historical valuations.
• 📉 The discount rate is used to find the present value of future cash flows, accounting for inflation and opportunity costs.
• ⏳ The time value of money is essential, as a dollar today is worth more than a dollar in the future, which is why future cash flows are discounted back to the present.
• 🛡 A margin of safety is added to the intrinsic value to account for uncertainties and to ensure that the investment is made at a price lower than the calculated value, reducing risk and potentially increasing returns.

Q & A

What is the basic principle Warren Buffett uses to evaluate the value of a stock?

Warren Buffett evaluates the value of a stock by comparing the intrinsic value of a business to its market capitalization. He considers the amount of money the business would generate annually and calculates how much one would be willing to pay for it to get a good return on investment.

What is meant by the 'intrinsic value' of a business according to the script?

The intrinsic value of a business is the total amount of money it would generate from now until the end of time, discounted by an appropriate discount rate. It represents the true value of the business.

How is market capitalization calculated?

Market capitalization is calculated by multiplying the number of shares of a business by the current price per share. It represents the total value of the business as it is valued in the stock market.

What does it mean if the market capitalization is higher than the calculated value of a business?

If the market capitalization is higher than the calculated value, it means the business is overvalued, i.e., it is priced higher than it should be based on its expected cash flows.

What does it mean if the market capitalization is lower than the calculated value of a business?

If the market capitalization is lower than the calculated value, it means the business is undervalued, i.e., it is priced lower than it should be, indicating a potentially good buying opportunity.

Why is it important to consider the cash flows of a business when investing in its stock?

Considering the cash flows is important because it helps determine how much money the business will generate in the future and whether the investment will yield a return. It's the basis for evaluating whether the current price of the stock is reasonable.

What is the concept of 'cost of opportunity' in the context of investing?

The cost of opportunity refers to the potential return that could be earned if the investment was made elsewhere. It represents the missed gains due to choosing one investment over another.

What is the significance of the 'discount rate' in evaluating the intrinsic value of a business?

The discount rate is used to determine the present value of future cash flows. It accounts for the time value of money and the risk associated with the investment, effectively bringing future earnings back to their present worth.

How does the script suggest calculating the future cash flows of a business?

The script suggests estimating the free cash flow the business generates each year and then projecting how it might grow annually over the next 10 years. This projection should be based on research and realistic assumptions about the business's growth potential.

What is the 'terminal value' in the context of the intrinsic value calculation?

The terminal value is the estimated value of the business at the end of a certain period (e.g., 10 years). It represents the lump sum that could be obtained from selling the business at that time, calculated by multiplying the final year's free cash flow by a cash flow multiple.

Why is a 'margin of safety' important when determining the intrinsic value of a business?

A margin of safety is important because it accounts for the uncertainty in predicting the future. By adding a margin of safety (e.g., 20-50%), investors can reduce the risk of their investment and potentially achieve a higher rate of return if their estimates are correct.