EBITDA

[smbruin22]

the answer is basically what someone already said....

it's just quality of information. and moderate adjustments.

my guess is munger doesn't like the fact companies have very negative earnings but then say their EBITDA is positive (or even better, positive on a pro-forma basis). my own guess is he doesn't like the shenanigans companies go thru to get to a pro-forma EBITDA....

Buffet and munger i think look more at cash flow, which is harder to manipulate. less chance to play around with accrual accounting and other non-cash items. cash flow isn't perfect either. but it's probably better.

lampert and co look at EBITDA but i would think they dig into the #'s quite aggressively and look at the quality of things.