Understanding EBITDA: A 60% Map to a 90% Map

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This chapter explores the concept of EBITDA in accounting, comparing it to a map of a territory that provides some information but not the complete picture. It discusses the limitations of EBITDA for capital-intensive businesses and emphasizes the importance of understanding the economic reality behind it for making rational decisions.

Tom Gayner, CEO of Markel Group, reveals the lessons he’s learned from Charlie Munger and Berkshire Hathaway, how he invests, and the specific way he thinks about opportunity cost.

Gayner shares the difference between good debt and bad debt, where he disagrees with Munger, and why he focuses on the basics.

This intimate conversation offers a level of insight and honesty that Tom hasn’t offered anywhere else.

Gayner is currently the CEO of Markel Group and the Director of The Coca‑Cola Company. He also serves as chairman of the Davis Series Mutual Funds board and on the boards of Graham Holdings and Markel.

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