Finding Warren Buffett’s limits on investing

Paul, en vän till vår VD, Peter, har ur olika böcker sammanställt de gränsvärden för investeringar som Warren Buffet angett för sina investeringar. Vi gjorde en modell efter Pauls anvisningar, men inställningarna har glömts bort. I veckan som gick hittade vi Pauls excelark på vår Google-sida.

Paul, a friend of our CEO, Peter, has compiled from various books the investment thresholds that
Warren Buffet
for his investments. We made a model following Paul’s instructions, but the settings have been forgotten. Last week, we found Paul’s excel sheet on our Google page.

Per-Ove has updated the WBWinner model with these default settings. This allows you to use the Viking screener to invest in the same way as Warren Buffett because you have access to the thresholds he uses before deciding which stocks to buy.

WB and Shareholders’ Safety Margins WB Criteria
Gross profit as % of turnover By the book. % >40%
Profit eft. Tax in % of turnover By the book. % >=15 %
Profit growth (after tax) By the book. % >=7 %
Direct returns By the book. % about 3.5 percent
R&D as % of turnover By the book. % Moderate
Depreciation in % of turnover. By the book. % <6%
Investment share of profit after tax Tax By the book. % <50%
Leverage ratio (Debt as % of equity) By the book. % <50 %
Equity ratio (equity as % of total assets) By the book. % >=30%
Liquidity (Current assets/short-term debt) By the book. X about 2
Return on equity By the book. % >=20 %
Equity/share By the book. SEK
Substantial value. (Stock market P/Equity per share) When investing X <1,5
P/E ratio When investing <=15 (see Appendix)
P/E against average P/E 10 years When investing % <75 %
P/E * P/EK When investing X <=22,5
PEG (PEG=(P/E)/Profit growth aft. Tax) By the book. X <2

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