Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.
"... Not to be confused with a pig, value trap, or a zero, that’s what Buffett calls the “intrinsic value” of a company. In Berkshire Hathaway’s 1989 Annual Report, Buffett reminded us that “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Amen brother.
Realizing that a lot has changed since Berkshire was buying smaller, under-covered, under-valued companies in the 1970s (when the SP500’s P/E was 7-8x), our all-star intrinsic deteriorating-cash-flow analyst, Kevin Kaiser, would love to interview Buffett on where his recent investment in Kinder Morgan (KMI) fits within his aforementioned definition of 'fair.'"