What is this?
How do I use it?
How does it work?
What if it doesn't work?
03-17-13 - 2012 Annual Update
03-25-12 - 2011 Annual Update. Lubrizol results have been annualized.
11-06-11 - Updated through Q3.
03-13-11 - 2010 Annual Update. BNI results are annualized.
I have added a new 'More Conservative' assumption set. The 'Conservative' assumptions value the subsidiary earnings
by discouting at the historical average treasury rate whereas the the 'More Conservative' assumptions value them at
12 times pre-tax earnings. Also, the 'More Conservative' assumptions only defer roughly one third of the taxes.
12-05-10 - 3rd Quarter Update.
09-10-10 - 2nd Quarter Update.
06-06-10 - 1st Quarter Update.
03-21-10 - 2009 Annual Update. You may need to upgrade to the latest version of Java if you are having problems (Thanks, Jim)
11-08-09 - 3nd Quarter Update. I've added a 'Post BNI' scenario that roughly adjusts the numbers assuming the BNI acquistion were to go through at today's BRK price.
08-16-09 - 2nd Quarter Update (finally).
05-17-09 - 1st Quarter Update.
03-01-09 - 2008 Annual Update. As before, I have used the mark to market liabilities for all the derivative positions except the equity put contracts
where I have capped the liability for now at a 25% loss in the indices from the levels at the inception of the contracts. As I have time, I
may add a control to allow you to specify the amount of the derivative liabilites to include in the intrinsic value calculation.
11-12-08 - 3rd Quarter Update.
08-10-08 - 2nd Quarter Update.
05-11-08 - 1st Quarter Update.
03-02-08 - 2007 Annual Update.
11-07-07 - 3rd Quarter update.
08-05-07 - 2nd Quarter update.
05-09-07 - 1st Quarter update.
03-03-07 - 2006 Annual update: Another great one. The subsidiary earnings growth assumptions have been made a little less optimistic in the
'Optimistic' assumption set.
11-04-06 - Q3 update
08-06-06 - Q2 update
05-07-06 - Updated for Q1. Although PacifiCorp only contributed 10 days worth of earnings, I've included a full quarter
of their estimated earnings.
03-06-06 - Whoops, found a mistake in the subsidiary earnings number.
03-05-06 - 2005 Annual update. A few notes: I've broken out the consumer installment loans from the financial
products results and now include them under subsidiary earnings. The default growth rates of the reinsurance businesses
have been lowered and the float costs for all of the insurance businesses have been adjusted. MidAmerican is consolidated.
11-06-05 - Updated for Q3
08-07-05 - Updated for Q2
05-09-05 - Updated for Q1
03-06-05 - 2004 Annual update. Steady results - 'Conservative' IV passes 100K.
11-06-04 - Q3 results included.
08-08-04 - Updated for Q2.
05-09-04 - Updated for Q1. I also corrected a small under reporting of the 2003
03-07-04 - 2003 Annual update. I'm running out of adjectives. Juggernaut would
seem to describe the current results best. I've updated the float growth and
cost estimates to reflect less growth and tighter underwriting. The segment breakdown
this year is very enlightening and may suggest some better ways in the future
to tally the results.
11-08-03 - Q3 results now included. Another nice quarter - these are starting
to get routine. I am considering updating the interface to the calculator. If you
have any suggestions, send them via the comments/suggestions link at the bottom
of the page.
08-09-03 - Updated for Q2 results.
05-11-03 - Updated for Q1 results. I've also modified a couple of the built
in assumption sets. I've now set the floor discount rate to 7%. Also, I've
changed the Conservative assumption set to use this same floor rate. Otherwise,
valuations were getting stretched by current extremely low interest rates.
03-08-03 - 2002 Annual update. Great year! I've made a few changes to
the calculator. First, you will notice that I've broken out a couple of
new items. I've changed the valuation of the financial products business and
now base it on the book value of the business. See my previous comments for
the motivation. Warren made note of this as well in the annual report. I also
now show the Mid American bonds seperately. This is just to keep track of them
as well as to give me a place holder for future non-capitalized investments.
The second change is the addition of a new graph that shows current price compared
to the IVs calculated by the various assumption sets. If you add a 'User' set, by
changing any of the canned assumptions, it will show up on the graph as well. This
gives a quick way to see where the current price ranks against the range of IVs from
conservative to aggressive. Finally, I've updated some of the descriptive text to
give a clearer picture of how I calculate some of the values.
11-09-02 - Reconciled Q3 results. I'm going to have to change the
way I account for the financial products results. The earnings swings
are too large and of questionable duration to be capitalized. I'll probably
modify the calculator to value the finacial products based on the
assets/liabilities of that part of the business.
08-14-02 - I've discovered some inconsistencies in the subsidiary
earnings numbers. I've gone back and reviewed all of that data and
modified where needed. I've also slightly adjusted the 'Optimistic'
and 'Cost of Capital' assumption sets based on the latest outlook.
08-10-02 - Updated for Q2 results. Blowout Quarter.
05-11-02 - Updated for Q1 results.
05-7-02 - Updated float totals based on Q1 information released on BRK website.
03-10-02 - 2001 annual report data is now included. Looking at the various numbers, it appears
that intrinsic value (according to the calculator) actually grew
slightly during the year even though the chairman's letter says that
intrinsic value "probably decreased a bit less" than the growth in book value. Hmmmm...
11-12-01 - Updated for Q3 results.
08-12-01 - Q2 results now included. I've also modified the assumptions
in the optimistic assumption set and cleaned some of the historic data.
05-13-01 - Updated for Q1 results. The Intrinsivaluator was mentioned in
a column on TheStreet.com. Click here to check it out.
03-11-01 - The annual report data has been reconciled with the existing
data in the calculator. Just eyeballing the numbers using a constant discount
rate, it looks like intrinsic value grew by about 10% year over year. A couple
of notes on the data: 1) MEC holdings are included in fixed investments 2) 'Other
Primary' float is included in BHRG float. I'm keeping the PW report assumption set,
but it should be understood that those assumptions were valid as of two years ago
when the report was written.
11-11-00 - Updated for Q3 results.
08-20-00 - Modified the "Optimistic" assumptions to reflect
recent results and projections.
08-13-00 - Updated for Q2 results.
05-14-00 - Updated for Q1 results.
03-18-00 - I'm using nearby bond yields instead of the current
30 year rate to try and better reflect true long term interest rates.
The current 30 year rate is skewed due to supply issues.
03-11-00 - I've reconciled the numbers from the annual report for
year end 99 and current data. Before the report, I wasn't sure if I was
going to be able to obtain the float numbers by business since I had to
estimate some of the data for the calculator. To my pleasant surprise, this
year's letter contains a table with the numbers broken out by business
as well as the last few years data filled in.
- 02-19-00 - More changes and additions. The float is now broken
up into 3 parts which better reflects the actual makeup of the
businesses and gives more control on the growth rates and costs. The
LT debt is now broken out seperately which fixes some problems when
you were using look-through earnings to value the equity holdings. I
used to subtract the debt from the equity investments which was not
clear at all but was how the calculator started. Once again,
"Steve" came through and provided the needed historical
data for me. During this process, I noticed that the debt deduction
was inconsistent for some of past years, so hopefully the calculator
is now a little more accurate as well. You'll notice some changes in
the historical measures due to these updates. There is now another
way to value the float, if you enter a pound sign (#) for the float
return, the current float will be valued as equity and the future
float growth will be valued as a cash flow stream. Also, if you enter
something like x20 in any of the growth rate fields, that instructs
the calculator to use a multiple (in this case 20) on the input to
get the present value.
- 02-12-00 - You can now specify an offset from the treasury
rate for the discount rate and float growth. If you enter something
like +2 or -1, this instructs the calculator to take the treasury
rate and add/subtract the value after the plus/minus sign to form the
input. Since + and - are now used for something else, the calculator
now uses the pound sign (#) to instruct it to use the entered
discount rate as a floor rate.
- 01-21-00 - The P/IV meter now displays the average
historical P/IV ratio for the chosen assumption set.
- 01-15-00 - The Price/IV stats have been replaced with a
graphical indicator, the "Intrinsimeter", that hopefully
makes it easier to see the P/IV ratio in historical context. The
range of the bar is based on the past range of values of the P/IV
ratio for a given set of assumptions. The current P/IV ratio for the
selected scenario and assumption set is indicated by the pointer.
- 01-12-00 - I've updated the descriptive text below the
calculator to include the new features and cleaned up some of the old
stuff. The IV subtotals now display the total value as well as per
share values to make it easier to compare to the inputs. I've added
the historical dividend information to the equity earnings so that
data should now be correct for as far back as I have it. Thanks to
"Steve" for helping me with the historical dividend
information and to "Howard" for lots of good suggestions
for new features and improvements.
- 01-08-00 - Lots of new stuff. The calculator now contains
several sets of assumptions that cover a range of expectations and
ways of looking at the valuation. If you make changes to one of the
assumptions, the calculator will create a User assumption that will
be tracked so that you can compare your custom set to the canned ones
provided. If anyone has an assumption set that they think should be
built in, let me know.
The calculator has a few other new features that are used in some of
these new assumptions. You can now specify the discount rate for each
DCF calculation. You can still use a single discount rate as before,
with the same results, but you can now enter something of the form:
r1:r2:r3:r4 where r1 is the discount rate for subsidiary growth, r2
is the discount rate for equity earnings growth, r3 is the discount
rate for GEICO float growth, and r4 is the discount rate for GRN
float growth. Further, for each discount rate, you may specify a
blend of treasury rate and a fixed rate. This is useful for defining
discount rates based on the cost of capital. The format for this
blended rate takes the form of %P|F where P is the percentage of
fixed rate F to use - the remaining percentage is based on the
current treasury rate.
If you place an ! at the front of the subsidiary earnings growth
specification, the calculator will use after tax earnings (35% rate)
as the input to the DCF calculation. Likewise, an ! at the front of
the equity earnings growth specification with instruct the calculator
to apply a tax (14% rate) on the equity earnings as if they had been
paid out in the form of dividends.
I'll add further descriptions of all of these features as well as for
all of the canned assumptions in the various sections below as time permits.
- 01-03-00 - The calculator now displays the IV subtotals
that make up the final IV value. The five subtotals correspond to the
five terms that specify the intrinsic value as described under How
does it work. I'll be adding some other new capabilities soon as
well as revisiting my default assumptions. The Intrinsivaluator
received a small writeup on the Forbes website recently. Click
here to check it out.
- 01-02-00 - I've realized that the equity earnings field
(not used with the default assumptions) for all years is too low
because it does not include the dividends received on the equity
holdings. For the way the calculator uses these values (as a
substitute for the market prices of the equity holdings), the
dividends must be included for the calculations to be correct. I've
updated the values back to 1995 but it will take a little while to
get the others.
- 11-27-99 - A couple of people have asked me about the
annuity formula in the calculator. Originally, for the sake of
simplicity, I left out some of the details of the annuity calculation
in my explanation of how the calculator works. This lead to more
confusion rather than less, so I have added some text to the
description of the annuity formula as well as expanded the full IV
equation (assuming no multi-stage growth) to include the actual
computations that the calculator performs.
- 11-15-99 - I've reconciled the current data with the Q3
report. Based on the report, I've assumed that GEICO float has grown
12% year to date with GRN float falling about 3.5% year to date.
Also, I've lumped the 1.25B retroactive reinsurance contract entered
into by the Berkshire Hathaway Reinsurance Group into the GRN float
as that is where it best fits into the calculator.
- 10-17-99 - Thanks to "Steve" for lending me his
library of Berkshire Hathaway annual reports. This has allowed me to
add historical data to the calculator back to year end 1981. One
thing jumps out - the shares were much cheaper historically compared
to any measure of intrinsic value.
- 10-3-99 - I've added historical data for year end 1993 and
1994. I'll be adding data back to 1991 and maybe as far as 1988 soon.
- 9-13-99 - The calculator now displays a price/intrinsic
value ratio for both the A and B shares. Note that the price/IV ratio
was quite high at the end of 1998 (not to mention in June 1998) and
is just now getting back to a more normal level. Also, I am looking
for more historic data for the calculator. If anyone has access to
Berkshire annual reports prior to 1995 and would be willing to
extract some data for me, let me know via the comment link at the
bottom of the page.
- 9-11-99 - I've added a new feature to the calculator. If
you leave all of the assumptions blank, the calculator will calculate
a conservative intrinsic value based on the following:
- value of investments, equity investments plus fixed investments
ignoring deferred taxes
- value of float, treating it as 1 to 1 with equity assuming no growth
- value of subsidiary earnings, discounted at the current treasury
rate assuming no growth
- 8-15-99 - I have reconciled the current data with the Q2
report. Based on the report, I have left the float amounts the same
and updated my assumptions for the amount of the float earnings that
are being plowed back and the cost of the float. I am now assuming
that 100% of the float earnings are plowed back for GEICO for the
first 5 years and 50% for the following 5 years and the cost of the
float for GEICO and GRN are 1% higher than before.
- 7-28-99 - I discovered a bug in the calculator (thanks to SS
Investor) that caused multi-stage growth calculations to be too
low. Basically, the calculator was not adding the discounted present
value of the stages to the terminal value calculation. That is now
fixed and I have added a couple of new options. The first option is
that the multi-stage growth specification can now designate a
percentage of the present value of each stage to be used to fund the
growth of the stage. This allows you to "pay" for outsized
growth by plowing back some of the earnings for a period of time. The
second option is to value the equity investments based on
look-through earnings. This lets you value the equity investments
independently of the market based on the actual earnings stream.
Also, I have revised some of the default assumptions based on both
further thinking and the additional options.
What is this?
The "Intrinsivaluator" is a tool to help estimate the
intrinsic value of Berkshire Hathaway. If you don't understand the
concept of intrinsic value, you might want to visit the Berkshire
Hathaway home page and read the chairman's
letters and the owners
manual. Intrinsic value by its nature is an estimate, meaning
there is no "right" way to calculate it. In that spirit,
this tool calculates intrinsic value in one particular way (although
with many options) and may not correspond to your idea of how it
should be done. In fact, I make no claims to its accuracy, but I
would welcome feedback or suggestions for improvement. Enjoy it, but
use the results at your own risk.
How do I use it?
The instrinsivaluator contains yearly data starting from year end
1981 plus current data. You can access data for a specific timeframe
by selecting a "Scenario" from the pull down list box. Each
scenario contains the following data:
The current investments (as best can be estimated), deferred taxes,
and treasury yield are updated weekly. The weekly data is
synchronized and the earnings, float, shares outstanding, and debt
are updated with the quarterly and annual reports as they become available.
The intrinsivaluator acts on this data based on the values of the
assumptions along the right hand side. The calculator includes 4 sets
of canned assumptions that I've picked to hopefully represent a
range of expectations and valuation viewpoints. You can make changes
to the assumptions provided and the calculator will create a 'User'
assumption set that will track your changes. Once you have a custom
assumption set, you can flip back and forth from it to any of the
other built in assumption sets for easy comparisons.
Here are the ideas behind the built in assumptions:
Optimistic - these assumptions are designed to project
realistic growth rates discounted at the long term treasury rate. The
investments are valued at the market and the float is assumed to
return a historical mix of 50% equities (historical return 11%) and
50% fixed income (historical return 6%). One half of the deferred
taxes are considered liabilities. Realize though, in using the
current long bond as a discount rate, that this value reflects a
comparison to that of a risk free alternative.
Cost of Capital - this assumption set is the same as the
optimistic set except that the growth is discounted based on the
weighted cost of capital. The float pool is assumed to be using a
policy of 50% equity and 50% fixed income so the discount rate for
the float is a 50/50 blend of historical equity return and current
Conservative - these settings configure the calculator to
approximate the method suggested by the table of investments and
earnings in the chairman's letter of the annual report. It values the
investments at the market, the float as equity (by setting float
return to discount rate and assuming no growth), and the subsidiary
earnings discounted at the current treasury rate. The deferred tax
liability is ignored.
Liquidation - like the conservative assumptions, the
investments are valued at the market, but assumed converted to cash.
This means that the entire deferred tax liability is subtracted from
the value. The float is valued as equity and the subsidiary earnings
are valued at 10x after tax earnings.
The individual assumption field definitions are as follows (see How
does it work for more detail) :
Discount Rate - this is the rate by which future values are
discounted to the present. There are several options for discount
rate values. If you enter a number greater than zero, this is the
discount rate that will be used for all calculations. If the field is
left blank or zero, the LT Treasury rate from the scenario will be
used as the discount rate. You can also specify an offset from the
current treasury rate by entering a value with a plus(+) or minus(-)
sign proceeding the value. In this case, the value will be
added/subtracted from the current treasury rate to produce the
discount rate. If a pound sign (#) proceeds the discount rate, then
the LT Treasury rate will be used unless it is less than the absolute
value of the discount rate field, in which case the absolute value of
the discount rate field will be used. This is a way to put a floor
rate on the treasury rate. Additionally, you may specify the discount
rate to be used for each of the 5 growth assumptions. This takes the
form of r1:r2:r3:r4:r5 where r1 is the discount rate for subsidiary
growth, r2 is the discount rate for equity earnings growth, r3 is the
discount rate for BHRG, r4 is the discount rate for GEICO float
growth, and r4 is the discount rate for GRN float growth. Further,
for each discount rate, you may specify a blend of treasury rate and
a fixed rate. This is useful for defining discount rates based on the
cost of capital. The format for this blended rate takes the form of
%P|F where P is the percentage of fixed rate F to use - the remaining
percentage is based on the current treasury rate. If you are
specifying individual discount rates, each rate may also use the
#,+,- prefixes to use a floor rate or an offset from the treasury rate.
- Float Return - this is the assumed rate of return on the
float pools. If this field is left blank, the treasury rate will
be used for the float return. Also, like the discount rates, you may
proceed the value with a plus(+) or minus(-) sign which will instruct
the calculator to add/subtract the value from the current treasury
rate in order to form the float return. If you enter a pound sign (#)
in this field, the float will be valued in a slightly different
manner. The current float will treated as equity and the initial
growth rate will be substituted for the float return for each pool.
- Growth Rates - there are five growth rate input fields
controlling the assumed rate of equity earnings growth, subsidiary
earnings growth, BHRG float growth, GEICO float growth, and GRN float
growth. For any of these fields, if a simple number (can be positive,
negative, or fractional) is entered, the perpetual annuity formula is
used to calculate the present value of the earnings stream (see How
does it work). However, sometimes growth estimates require a
multistage model to calculate the present value of earnings stream.
You can enter a specification in the growth field to define the
multistage model. It takes the form of g|y:tg where g is the growth
rate for y years and tg is the terminal growth rate for the perpetual
annuity calculation. You can string as many stages together as you
like to model the growth. For example, the specification
g1|y1:g2|y2:tg would mean grow at g1 for y1 years, then grow at g2
for y2 years with a tg terminal growth rate. Additionally, some of
the growth may be assumed to be plowed back into the business in
order to generate the faster growth. To specify the non-plowback
percentage, the specification g1|y1%p1:tg may be used for each stage
where g1 is the growth rate of the stage, y1 is the length in years
of the stage, and p1 is the percentage of the present value of the
stage not to be reinvested to generate the growth (also
known as the dividend payout ratio). By default, none of the present
value of the individual stages is assumed to be used to fund the growth
(p1=dividend payout ratio=100). To avoid the whole
discount rate/growth rate specification, you may also enter something
of the form xM which will instruct the calculator to use the multiple
M on the input to obtain a value. For example, to specify a 10
multiple, you would enter x10.
- Equity Earnings growth - this is the growth specification
for look-through earnings. If this field is left blank or contains a
single space, the investments will be valued at market prices.
Otherwise, this growth rate specification is applied to the equity
earnings to value the equity portion of the investment pool. If an
exclamation point (!) begins the growth specification, the calculator
will use assume a 14% tax on the equity earnings as if they had been
paid out in the form of dividends.
- Subsidiary Earnings growth - this is the growth rate of
earnings for the non-insurance subsidiaries. If an exclamation point
(!) begins the growth specification, the calculator will use after
tax earnings as it's input by subtracting 35% of the pre-tax earnings
from the scenario data.
- BHRG growth - this is the growth specification for the
- GEICO growth - this is the growth specification for the
- GRN growth - this is the growth specification for the
General Re float.
- BHRG cost - this is the cost of the BHRG float. A negative
number indicates a net underwriting profit.
- GEICO cost - this is the cost of the GEICO float. A
negative number indicates a net underwriting profit.
- GRN cost - this is the cost of the General Re float. A
negative number indicates a net underwriting profit.
- Tax deferral - this is the percentage of deferred taxes
that will not be included as liabilities.
Try changing the assumptions and note the impact on the intrinsic
value per share. After you play around with it for awhile, pick
assumptions that make sense to you. You can then see how, by using
these assumptions, the intrinsic value estimate would have compared
to the actual stock price for various timeframes.
How does it work?
The intrinsivaluator is based on the following formula:
IV = value of investments + value of non-investment non-insurance
earnings + value of float - value of debt
Value of investments
The value of the investments is the sum of the cash, fixed maturity,
financial products, Mid American Holdings, and equity valuation
minus the total amount of float divided by
the total shares outstanding. The float is the total of the funds
have been paid by policyholders to cover future but not incurred
claims and cannot be accounted as owned by Berkshire. The equity
portion of the investments may be valued either via look-through
earnings or at market based on the value of the investments growth
specification. The fixed maturity portion of the investment pool is
always valued at the market.
Value of non-investment non-insurance earnings
The value of the non-investment non-insurance earnings are valued via
the perpetual annuity formula:
pv = c/(k-g) where:
c = coupon
k = discount rate
g = coupon growth rate
It should be noted that the coupon, c, that is specified in the
annuity formula is for the end of year one. The calculator takes as
its inputs, trailing 12 month data, which corresponds to the year
zero coupon. Since we have the annual growth rate, g, we can compute
the year one coupon as: c1 = c0*(1+g). Thus, the actual formula used
internally by the calculator is:
pv = (c0*(1+g))/(k-g) where:
c0 = 12 month trailing coupon
k = discount rate
g = coupon growth rate
Using the annuity formula is only reasonable if the you have a steady
reliable coupon. Fortunately, the subsidiary companies that make up
Berkshire are of high quality and produce steady earnings without a
lot of capital infusion. Pre-tax earnings are used because the
discount rate is typically an interest rate metric that is also a
pre-tax number. Purchase accounting adjustments are removed from the
earnings because they do not reflect any economic reality. The
intrinsivaluator does not discount investment earnings because they
are factored into the investment value and does not discount
insurance earnings because they reflect underwriting results.
Underwriting results can vary widely from year to year and are best
aggregated as a cost of float. Since the intrinsivaluator is valuing
a perpetual annuity, growth rate inputs to the formula are perpetual
as well. This means that growth greater than the long term rate of
GDP growth of around 3 to 5 percent is probably optimistic.
You may also notice that as g approaches k, the future value will
head toward infinity. While picking conservative values for g and
placing a floor under k helps avoid this, there are legitimate cases
where the growth may indeed be greater than the discount rate over
shorter periods of time. In this case, the intrinsivaluator allows
for a multistage growth model. For multistage growth, the
"earnings" are grown each year of the stage by the growth
rate and then discounted by (1+r)^y where r is the discount rate and
y is the year number of the calculation. These discounted earnings
are then summed and added to the terminal value which is calculated
by multiplying the "investment amount" by (1+g)^y (where g
is the growth per stage and y is the length of the stage in years)
for each stage of the growth. The annuity formula is then applied for
the terminal growth and the result is discounted back by dividing by
(1+r)^Y (where r is the discount rate and Y is the sum of the length
of the stages).
For more details on DCF calculations, see the Discounted
Cash Flow Calculator and check out its How
does it work? section.
Value of float
As mentioned above, the float is money that Berkshire can make use
of, but does not own - it must be reserved for payment of future
claims. However, Berkshire gets to keep the results of any earnings
obtained from the float. This means the results of investing the
float are essentially transferred from the insurance business to the
investment business. The intrinsivaluator values these results again
by using the perpetual annuity formula optionally augmented with a
multistage growth formula. The annuity formula is appropriate as long
as the float can be assumed to be constant or growing, and as long as
the coupon is reliable. In this case, the coupon is derived by using
the float return assumption against the float. The process of
generating the float has a cost which can be either positive or
negative. This cost reflects the average underwriting results of each
insurance business and is deducted from the float return before the
coupon is calculated. As in the case of the subsidiary earnings,
limited terminal growth rates are appropriate and the float return
assumptions should be tempered with an eye toward the average long
term treasury bond return as this helps to ensure a reliable coupon.
The float pools are valued separately because they are different
types of insurance businesses and as such, may potentially have
different float costs and growth rates.
Value of debt
Debt consists of deferred tax liabilities and other long term debt.
Berkshire holds in its investment portfolio many positions that have
unrealized capital gains. If these positions were liquidated, there
would be taxes due that are reflected as the deferred tax liability.
Fortunately, the major holdings are of a quality that allows a long
term view and they are not likely to be disposed of anytime soon. The
tax deferral assumption controls what portion of the liability that
the intrinsivaluator may consider a non-liability - as some of these
holdings may be perpetual. What is left over is added to the other
long term debt and that sum is deducted from the intrinsic value.
What if it doesn't work?
If you find that the calculator does not show up, you may need to download
the Java runtime environment to your computer. The latest versions of Windows
no longer come with a Java VM installed by default and you will need to download
a copy. Go to the Sun Java website and follow
the download instructions (it's easy).
If you're running Netscape 4.x (Communicator) behind a firewall, the
applet may fail to load due to the following error which will show up
on your Java console:
Applet exception: class IV got a security violation: security.
Could not resolve IP for host creativeacademics.com. See the trustProxy property.
To fix this, do the following:
Quit Communicator completely - this means close all instances.
- Edit the Preferences file. The name and location of the file
varies depending on your platform:
- On Windows 95 and NT, \Program Files\Netscape\Users\(user name)\prefs.js
- On UNIX, ~/.netscape/preferences.js
- On Macintosh, "System Folder:Preferences:Netscape f:Netscape Preferences"
- Add the line:
See also: Security
Preferences for Communicator.
Comments and Suggestions
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