berkshire hathaway, page-17

"Any new trader coming into the market could learn from Buffett."

agree hundred percent

one thing that i am interested in is how Buffett does his valuations

lets say you have a company that is priced at $20 on the stockmarket
its PE =10
eps =$2
return on equity = 20%
growth rate = 20%

Mary Buffett in her book bases it on future returns

growth rate = 20%
Initial earnings figure = $2
Average PE = 10
intial price = $20

earnings five years down the track = $4.98
average PE = 10
price in five years $49.80

to get an expected rate of return of 15% you would pay anything up to $24.75

Roger Montgomery uses this formula

(ROE/ pretax RR) x EQPS = Intrinsic value

ROE = Return On Equity
RR = Required Return

EQPS = Equity Per Share

Eg

ROE = 20%
RR = 15%
EQPS = $10

(.20/.15) x $10 = 1.33 x 10 =$13.30

so according to Roger Montgomery he wouldn't pay $20 for these shares

in fact he wouldn't buy them unless they fell below $13.30

so on the one hand you have Mary Buffett saying that the shares are cheap below $24

and Roger Montgomery saying they are expensive

"Snowball" didn't help

check out what roger montgomery says here

http://boardroom-pc.streamguys.us/files/ASX/ASX20080822/