Charlie Munger & Warren Buffett discuss the dangers of the financial metric EBITDA. Munger and Buffett identify EBITDA as a way management reports financial results inaccurately and can be used to manipulate shareholders.
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17 Comments
I worked at a finance company and they explained EBITDA for me. At that time I thought it was the stupidest shit ever, and I struggled to understand why it mattered, but I figured it was the industry standard so I left it at that and did my job. I left that company, and years later I see this. Glad to know that my intuition and common sense were right. Still, it's the industry standard, which says everything you need to know about finance.
A right pair of heavy weight thinkers.
Little wonder that both are self made billionares
EBITDA. Just remember that they don't call it this for nothing. Earnings Before I Tricked The Dumb Auditor.
Is anyone talking about GE as an enormously successful company anymore?
wait, why is this being recommend, i have no plans investing or anything related to what they're saying haha..
Fun fact, they've registered the best EBITDA on financial stocks this year chg%
Fun fact: the “Maxwell of England” they reference is Ghislaine Maxwell’s father
Is there a difference between Operating Cash Flow and EBITDA?
One caveat to this is some companies with normal amounts of bank leverage are required by the banks to have certain EBITDA numbers and therefore the company will focus on that number. Doesn’t mean they don’t also focus on the bottom line but EBITDA will take in a type of cash flow significance because they are beholden to the banks to some degree.
A little off topic but that bunch from Brazil sure took Warren on Kraft Heinz. That stock fell from near 100 a share to the teens. I still do not know how someone did not go to jail. And Wells Fargo CEO Stump played with the books as well.
Very nice. Which year was this?
This was a really good one, thanks!
At 6:30, they are talking about Robert Maxwell who was the father of Ghislaine Maxwell (Jeffrey Epstein's partner in crime)
Now essentially every industry uses EBITDA, for better or for worse 🤔 probably worse.
cough netflix cough
Charlie is wise!
First comment!