As an alternative, the instructor could suggest that students perform a simple discounted cash-flow (DCF) analysis. 4.How well has Berkshire Hathaway performed? How well has it performed in the aggregate? What about its investment in MidAmerican Energy Holdings? 5.What is your assessment of Berkshires investments in Buffetts Big Four: American Express, Coca-Cola, Gillette, and Wells Fargo? 6.From Warren Buffetts perspective, what is the intrinsic value? Why is it accorded such importance? How is it estimated? What are the alternatives to intrinsic value? Why does Buffett reject them? 7.Critically assess Buffetts investment philosophy. Be prepared to identify points where you agree and disagree with him. 8.Should Berkshire Hathaways shareholders endorse the acquisition of PacifiCorp?
1.What does the stock market seem to be saying about the acquisition of PacifiCorp by Berkshire Hathaway? 2.Based on your own analysis, what do you think PacifiCorp was worth on its own before its acquisition by Berkshire? 3.Do you think Buffett is overpaying?
4.Here are the major elements of Buffetts philosophy. What do those elements mean? Do you agree with them? 5.Lets return to the basic issue. Is the PacifiCorp acquisition a good or bad deal? Why?