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America is worth way more than $90 trillion. He's valuing it like a buyer :) As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn. The son o
by logicallee 10y ago
America is worth way more than $90 trillion. He's valuing it like a buyer :)
As a quick back-of-envelope check: American GDP in 2016 was $18.86 tn.
The son of a bitch wants it at a 4.7 trailing multiple, after a relatively slow-growth year. All that praise - and then a 4.8x multiple. Now I know how he butters up his acquisition targets :)
EDIT: I am getting downvoted, but I am keeping this. You guys don't realize that valuing companies is what he does all day, every day. That's literally his job. When he throws a figure like $90 trillion out for America, that is not casual or haphazard - it took him a few seconds to come up with that, and he did it on some basis. We get real insight into his thinking, especially when it comes following such lavish praise. In my opinion I am making a good contribution in pointing this out. We've just learned something.
- purple-again 10y agoYou are probably getting downvoted because it seems unlikely that a multiple of GDP had to anything to do with Mr. Buffets analysis of American Wealth. https://en.wikipedia.org/wiki/Wealth_in_the_United_States https://en.wikipedia.org/wiki/Wealth_in_the_United_States
- logicallee 10y agoI think my metric is fine. The link you just quoted says "Including human capital such as skills, the United Nations estimated the total wealth of the United States in 2008 to be $118 trillion" - up to you if it's higher or lower 8 years later. His estimation is still low. Anyway value is not usually priced in terms of wealth, though - but on the future.
- purple-again 10y ago"U.S. household and non-profit organization net worth rose from $44.2 trillion in Q1 2000 to a pre-recession peak of $67.7 trillion in Q3 2007. It then fell $13.1 trillion to $54.6 trillion in Q1 2009 due to the subprime mortgage crisis. It then recovered, rising consistently to $86.8 trillion by Q4 2015"
- oblio 10y agoI upvoted you, I guess most people downvoted you for the use of "son of a bitch", since most people like Warren Buffet. Regarding the 90 trillion, I disagree with him. I see a country as a pearl: there's a tiny nugget, a bit of dust or some other small thing that starts the process of creating the pearl inside the shell of they oyster. Then over time more and more mother of pearl is deposited until the pearl is created. The US mainland hasn't seen a war since 1865. Even the Civil War never touched many parts of the mainland, such as New York or Chicago. And you've been depositing "nacre" for over 2 centuries at a rate that in the past decade has been around 10 trillion per year. I know that a lot of that wealth doesn't actually come back to the US, a lot of it is immaterial, that there's also a lot of destruction and regeneration even without war, but there's no way I'd evaluate the current wealth of the US at only 90 trillion. It's got to be at least 10x the current GDP, if not more, in my opinion.
- phreeza 10y agoAn interesting thought, is GDP really the correct figure to be looking at though? Really what we would want is the 'national earnings' in a net sense.
- davidivadavid 10y agoYou're talking income statement. He's talking balance sheet. Apples and oranges.
- nycdatasci 10y agoFrom: https://www.federalreserve.gov/releases/z1/current/z1.pdf https://www.federalreserve.gov/releases/z1/current/z1.pdf "The net worth of households and nonprofits rose to $90.2 trillion during the third quarter of 2016."
- ssalazar 10y agoSo? That doesn't evidently include business assets let alone future growth.