Finding Warren Buffett’s limits on investing
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 |
About the Viking
With Viking’s signals, you have a good chance of finding the winners and selling in time. There are many securities. With Viking’s autopilots or tables, you can sort out the most interesting ETFs, stocks, options, warrants, funds, and so on. Vikingen is one of Sweden’s oldest equity research programs.
Click here to see what Vikingen offers: Detailed comparison – Stock market program for those who want to get even richer (vikingen.se)
