Michael Mobison interviews Todd Combs at the Graham and Dodd breakfast. Combs says he goes to Buffett's house on most Saturdays and they talk through three criteria. They are stocks in the S&P 500 that one trade at a next 12 month PE of 15 or less. Two, they have a 90% confidence The company will have higher earnings five years from now. And three, they think the company can grow earnings per share at least a 7% Kager, compounded annual growth rate for the next five years with a 50% confidence level.
Can you think of any stocks in the S&P 500 that will have higher earnings five years from now? Are you 90% confident in your prediction? If you have a good answer to these questions, then you might be able to start investing like Warren Buffett. Motley Fool Senior Analyst John Rotonti joins Ricky Mulvey to discuss: - What one of Buffett’s lieutenants revealed about Berkshire’s stock-buying framework - How investors can use the framework, and why so few stocks fit - One company that may fulfill Berkshire’s criteria Companies discussed: BRK.A, BRK.B, KO, USB, NVR Interview with Todd Combs - https://investmentmanagementinsights.substack.com/p/graham-and-dodd-annual-breakfast Berkshire’s 1986 Letter to Shareholders: Chairman's Letter - https://www.berkshirehathaway.com/letters/1986.html Host: Ricky Mulvey Guest: John Rotonti Engineer: Tim Sparks
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