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April 6, 2020

RSS Aswath Damodaran’s Musings on Markets

  • A Viral Market Meltdown V: Back to Basics! March 31, 2020
    My first post on this blog was on September 17, 2008, a week into the 2008 crisis, and I honestly did not expect to be posting for long, anticipating that after a few posts, that crisis would be behind us, and that we could go back to our lives. That of course turned out not […]
  • A Viral Market Meltdown IV: Investing for a post-virus Economy March 23, 2020
    At the end of each of the weeks leading into the last one, I have done a market update, reflecting the changes that occurred in the week, not just to market values, but also to investor psyches, and each week, I have hoped that it would be the last one needed for this crisis. That […]
  • Data Update 7 for 2020: Debt Delusions and Reality March 21, 2020
    In the midst of a crisis, it is very difficult to think about life in its aftermath, but there will come a time, when investors and companies will shift their focus. To be able to do so, they have to survive the crisis, and for many companies, that has become the immediate challenge. In the […]
  • Data Update 6 for 2020: Profitability, Returns and the value of Growth March 21, 2020
    In an age, where scaling up and growth seems to have won out over building business models and profitability, as the most desirable business traits, it is worth stating the obvious. The measure of a good business is its capacity to generate not just profits, but also to convert these profits into cash flows that […]
  • A Viral Market Meltdown III: Pricing or Value? Trading or Investing? March 16, 2020
    This is the third, and I hope the last, of my viral market updates, reflecting how much change a week can deliver, and last week delivered more change than most investors could handle. Not only did we see two of the worst market days in history, in absolute terms, we also saw the worst single […]
  • A Viral Market Meltdown Part II: Clues in the Debris! March 9, 2020
    Update on 3.9/20: In a sign of how volatile times are, over the weekend, oil prices plummeted to close to $30, the treasury bond rate to less than 0.4% and the market looks set to drop substantially. A work in progress indeed....I wrote a post on how the Corona Virus was playing out in markets on […]
  • Data Update 5: Relative Risk and Hurdle Rates February 27, 2020
    In my last four posts, I focused on the macro variables that we draw on, in both corporate finance and valuation, to estimate required returns or hurdle rates. In data post 3, I looked at how the prices of risk in both the bond market (default spreads) and the equity market (equity risk premiums) dropped […]
  • A Viral Market Meltdown: Fear or Fundamentals? February 26, 2020
    It has become almost a rite of passage for investors, at least since 2008, that they will be tested by a market crisis precipitated sometimes by political developments (Brexit), sometimes by governments (trade wars), sometimes by war and terrorism (the US/Iran standoff) and sometimes by economics (Greek default). With each one, the question that you […]
  • Data Update 4: Country Risk and Currency Questions! February 20, 2020
    In my last post, I looked at the risk premiums in US markets, and you may have found that focus to be a little parochial, since as an investor, you could invest in Europe, Asia, Africa or Latin America, if you believed that you would receive a better risk-return trade off. For some investors, in […]

RSS Dr David Kass commentary

  • Becky Quick on CNBC: Warren Buffett Will Not Speak Publicly Until the Berkshire Annual Meeting on May 2 April 5, 2020
    Becky Quick stated on CNBC that Warren Buffett would not speak publicly until the Berkshire Hathaway annual meeting on May 2. Therefore, he will not explain until then why he sold some of Berkshire’s shares in Delta Airlines and Southwest Airlines on April 1 and 2. Neither will he discuss, until May 2,  what purchases […]
  • Berkshire Sells Part of its Stakes in Delta Airlines and Southwest Airlines April 3, 2020
    In separate SEC filings after the market closed today, Berkshire Hathaway reported that it sold 18% of its stake in Delta Airlines at $24.19 ($300 million) and 4% of its stake in Southwest Airlines at $32.22 ($75 million) on April 1 and April 2.
  • The Stock Market is a Leading Economic Indicator March 26, 2020
    The stock market is a leading economic indicator. It looks many months ahead. Since it is likely the economy will be recovering and booting back up within 3 – 6 months, this may explain why the stock market is rising sharply for the third straight day.  
  • 10 Highlights of Ben Bernanke on CNBC – March 25 March 25, 2020
    Former Federal Reserve Chairman Ben Bernanke was interviewed on CNBC this morning.  Bernanke was Fed Chairman during the Financial Crisis of 2007-2009 and is an expert on the Great Depression. (1) Former Federal Reserve Chairman Ben Bernanke expressed optimism about the longer-term picture for the U.S. economy. (2) He sees a ‘very sharp’ recession, followed […]
  • Could Warren Buffett Bailout The Airlines? March 20, 2020
    I am quoted in this Yahoo Finance article: “One of those airlines would certainly be affordable and doable” for a Berkshire purchase, David Kass, a University of Maryland finance professor who once ran a Warren Buffett blog, told the Dallas paper. “But then the question is, would Buffett really want to do that?” (Note: Contrary to […]
  • Don’t Touch Your Face, or Your Stocks March 13, 2020
    I was interviewed in Smith Brain Trust (Robert H. Smith School of Business, University of Maryland). EXPERT OFFERS ADVICE IN A VOLATILE MARKET WEEK Mar 12, 2020 Finance SMITH BRAIN TRUST – For investors concerned about market uncertainty invoked by the coronavirus: Don’t touch your face and certainly don’t touch those stocks. In what has been a […]
  • Warren Buffett and Occidental Petroleum March 13, 2020
    I am quoted in Bloomberg on Warren Buffett and Occidental. Occidental’s dwindling market value has raised speculation over whether Buffett would ever buy the company outright. While Buffett has the funds, any eventual purchase would depend on his outlook for the oil market and other variables, said David Kass, a professor of finance at the […]
  • The Coronavirus and Teaching Remotely March 11, 2020
    I am quoted in the Baltimore Sun on the University of Maryland conducting all classes remotely because of the coronavirus. David Kass, a finance professor at College Park, said he’s canceled an annual trip to Charlottesville, Virginia, with his students. He’s been practicing how to conduct his classes online, and said that’s where university instruction […]
  • The Coronavirus and the Stock Market February 29, 2020
    I am quoted in the Baltimore Sun on the coronavirus and the stock market. “There is a lot of uncertainty,” said David I. Kass, a clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business. “No one knows the degree that Americans or any company will be affected. … There’s concern […]

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RSS The Business Times – Companies & Markets

  • Singapore fintech aims to be payment bridge to UnionPay April 5, 2020
    MOVE aside e-wallets. Here comes a digital payment account that will allow tourists in China to spend like the locals, without having to lug around hard cash that is barely accepted and the hassle of opening a savings account with debit facilities.
  • Safeguarding our economic resilience April 5, 2020
    WE are barely four months into 2020, but life before Covid-19 seems like years ago. As the epicentre of the disease shifts from Asia to Europe and the US, the human cost is growing.
  • Director acquisitions continue in a less volatile market April 5, 2020
    FOR the five trading sessions spanning March 27 to April 2, the Straits Times Index (STI) declined 1.4 per cent with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index averaging a 0.9 per cent decline. This has brought the STI's decline in total return for 2020 through to April 2 to 23.5 […]
  • US stimulus package a start but more needed: analysts April 5, 2020
    THE US$2 trillion stimulus package and unbounded US Federal Reserve monetary support looked big until weighed against last week's death toll and jobless data.
  • Singapore market likely to keep sinking April 5, 2020
    THE first quarter in 2020 saw the Covid-19 outbreak escalate into a global pandemic. As we enter the second quarter, focus will shift to Western societies as the infection rate in the US surpasses that of China's.

RSS The Business Times – Stocks

  • Director acquisitions continue in a less volatile market April 5, 2020
    FOR the five trading sessions spanning March 27 to April 2, the Straits Times Index (STI) declined 1.4 per cent with the Nikkei 225 Index, Hang Seng Index and S&P/ASX 200 Index averaging a 0.9 per cent decline. This has brought the STI's decline in total return for 2020 through to April 2 to 23.5 […]
  • STI posts worst Asia finish on Friday April 3, 2020
    THE Straits Times Index (STI) ended Friday down 63.74 points or 2.6 per cent at 2,389.29 points, ending the week 5.5 per cent lower than where it started.
  • SGX to stay open and accessible April 3, 2020
    SINGAPORE Exchange (SGX) on Friday said its securities and derivatives markets will remain open and accessible as Singapore closes most workplaces for a month from Tuesday.
  • STI underperforms regional benchmark indices on Friday April 3, 2020
    The Straits Times Index (STI) ended Friday down 63.74 points or 2.6 per cent at 2,389.29 points, ending the week 5.5 per cent lower than where it started.
  • Singapore shares decline at open; STI down 0.6% April 3, 2020
    SINGAPORE stocks on Friday morning declined https://www.businesstimes.com.sg/stocks/sti-overturns-early-losses-to-en... a strong finish the previous day.

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how warren buffett measures profit performance

Measuring profit performance

November 16, 2014

In his 1977 letter to Berkshire Hathaway shareholders, Warren Buffett said that “most companies define ‘record’ earnings as a new high in earnings per share”. This measure is not appropriate in Mr Buffett’s views. “Since businesses customarily add from year to year to their equity base, we find nothing particularly noteworthy in a management performance combining,

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