Philosophical Doctor Essay

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* Should Berkshire Hathaway's shareholders endorse the acquisition of PacifiCorp? * Would the PacifiCorp acquisition serve the long term goals of Berkshire Hathaway? * Was the bid price appropriate? * Because PacifiCorp was privately held by Scottish Power, how did Berkshire`s offer measure up against the company`s valuation implied by the multiples for comparable firms? Regarding Mr. Buffett`s investment philosophy, my disagreement points lays mainly in the per-share basis which he truly believes, diversification and risk and discount rate points. First of all, in my opinion, Mr. Buffett should use both per-share basis and complete value to give a better insight to his investors. Secondly, I agree with Mr. Buffet`s ideas when it regards that we must invest in our expertise areas, but I disagree that a moderate portfolio can bring damages to the investor or even that it might seem as ignorance. Finally, Mr. Buffett is right to use the CAPM method to assess his investments, but using the 30-year U.S treasury rate seems a little bit mistaken even if he is a non-risk taker or his companies are not financed by debt. In Mr. Buffett`s opinion, intrinsic value is the present value of the future expected performance. It`s estimated calculating the discounted cash flow of a business during its remaining life. It`s important because the DCF is the only logical way to evaluate the attractiveness of a business or an investment. Other alternatives to intrinsic value fall short in determining whether an investor is indeed buying something which is really worth and is therefore truly operating on the most basic principle which is aggregating value. The $2.55 billion gain in Berkshire`s market value of equity and the 6.28% jump on Scottish Power`s stock means that the acquisition was a win-win situation, creating value for both companies. Berkshire Hathaway`s

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