EBITDA

[SlowHabit]

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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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Do you know the differences in investing philosophies between Buffett and Lampert [img]/images/graemlins/confused.gif[/img]

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For the companies I analyze EBITDA is one of the most important things to look at.

[SlowHabit]

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For the companies I analyze EBITDA is one of the most important things to look at.

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Can you give examples of the industries they are in?

Or did you mean any company?

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companies with a lot of assets whose book value of depreciation is nowhere near close to an accurate gauge of what the assets realistically deteriorate at.