Tuesday, June 29, 2010

Are You Smarter Than Goldman Sachs?

So you graduated from a top rated medical school.  You went through the toughest residency offered in the country.  Your CV would make the Dos Equis beer guy jealous.  Now let's see how you would do on Wall Street.  The following is the formula a Goldman Sachs analyst uses to calculate the value of Berkshire Hathaway.  Now do you feel the GS guys deserve their millions they make every year?


1 comment:

  1. This set of formulae seems pretty simple. Value of their investments + value of their insurers' float + value of the rest of the company. The real "special sauce" would be Goldman's methods for finding the values of k and g (assuming that most of the other variable values can be picked up from public statements, which I think is the case), and how accurate those values turn out to be going forward.