Re: EBITDA
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Buffett and Munger don't use it. Munger went as far as saying "anytime you see the words 'EBITDA earnings,' you should substitue '[censored] earnings.'"
Lately, I have been reading Eddie Lampert's letter to shareholders and it's almost as if I was reading Buffett's letters [but with less humor]. One thing that stood out was Lampert's excessive use of EBITDA.
Lampert is currently managing a retail company. Does this means EBITDA is significant in evaluating retail businesses?
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Not necessarily. EBITDA provides one of several possible views of company earnings growth. Obviously if a guy is crowing about EBITDA he thinks it provides valuable insight. You'll have to evaluate the I,T,D, and A parts yourself to see if you agree with him.
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