Assets Quote by Warren Buffett
“Asset values and earning power are the dominant factors affecting the valuation of a controlling interest in a business. Market price, which governs valuation of minority interest positions, is of little or no importance in valuing a controlling interest.”
About This Quote
Source Letter: Berkshire Hathaway Shareholder Letter, 1979
Control value depends on the business’s earnings ability, not on market price of minority shares.
In simple terms: Control is about earnings, not price.
Key Takeaway
Focus on earnings power when valuing control.
Themes
valuation
control
business fundamentals
Mood
analytical
pragmatic
Type
financial
business
When to use this quote
- acquisition decisions
- investment analysis
- corporate finance
- strategic planning
Key Concepts
earnings power
dominant factors
valuation
investment strategy
Questions to Reflect On
- How do you assess earnings power?
- What risks arise from ignoring market price?
A Different Perspective
Market price can be misleading for control valuation.
![“[When I die], I will decidedly not be regretting missed opportunities for a good time. My regrets will be more along the lines of a sad list of people hurt, people let down, assets wasted and advantages squandered.” quote by Anthony Bourdain](https://sms4smile.com/quotes/img-quotes/ba3/anthony-bourdain-649_advantage_when-i-die-i-will-decidedly-not-be-regre_24502.jpg)
