Warren Buffet on the Intrinsic Value of a Business | Charlie Munger

In this video, Warren Buffet, one of the most successful investors of all time, discusses the concept of intrinsic value and its importance in evaluating a business. Intrinsic value is the estimated real value of a company, which is not necessarily reflected in its accounting or stock market value. Buffet explains that the intrinsic value can only be calculated retrospectively, and it is the cash to be generated between now and Judgment Day discounted at an appropriate interest rate. Buffet is asked about the rate at which Berkshire Hathaway, his investment company, has compounded intrinsic value over the last ten years. He explains that they have likely compounded at around 10%, but achieving that rate in the future will be difficult, if not impossible, in the current interest rate environment. He emphasizes that predicting interest rates is crucial in estimating future intrinsic value, and it is challenging to do so. Buffet also discusses the shareholder orientation and culture of decision-making at Berkshire Hathaway, which is focused on making decisions as a private owner would. He emphasizes the importance of staying rational rather than trying to be brilliant, which is a big advantage in investing. This video provides valuable insights into the mindset and strategies of one of the most successful investors in history. It is a must-watch for anyone interested in investing or business valuation.