Home > Finance and Stocks > Buffett’s Formula shows 79% margin of safety for Apple. Fair Value is $2101.42

Buffett’s Formula shows 79% margin of safety for Apple. Fair Value is $2101.42

Using Warren Buffett’s formula in this online calculator (you can try it too) I plugged in 30% annual growth for just 3 years before leveling off to just 3% growth.  I put the 10 year treasury benchmark in at 5% which is way over where it is now by 3% to be ultra conservative here.  Trailing earnings are 41.04 and said I was 50% confident these earnings would materialize. A safe bet coming off a 118% and 94% YOY quarterly gains.

Based on Buffett fair value formula Apple would be $2101.42 giving it a margin of safety right now of about 73%.  

Try and find any other stock in the market with this right now.  Oh yeah..forgot that my margin of safety doesn’t take into account the 110/share in cash.  With that the margin of safety is 79%.  That is pretty huge!

Sell at your own peril

 

Here is the calculator if you want to plug in your own values.

Advertisements
Categories: Finance and Stocks Tags: , , ,
  1. Mr. Krump
    May 6, 2012 at 4:02 PM

    I’m going to the market on Monday to purchase more cheeseburgers.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: