Buffett + Munger on EBITDA: Munger: "Its 'bullsh*t earnings'."

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Is this the greatest business one-liner of all time? Has to be, right?

EBITDA = 10 ITDA = 11 E = (1)

Munger is phenomenal but the key to this clip is listening to Buffett VERY closely

Accounting is done by accountants for regulation purposes. Not by investors for investors. Adjust your numbers people!

Man, Munger is hilarious! 😂

It’s crazy how many private equity deals are valued on EBITDA and not net income.

I never use EBITDA because it includes financial income but exclude financial expense!. I rarely use reported profit because it includes onetime income/expense. I use normalized profit, cash flow from operations and free cash flow to evaluate my investment decision.

Total master class of explanation by both men. Buffet attempting to educate, Munger providing the bottom line up front.

I 100% agree. I used to buy into that metric, but then got burned by companies that never got off that metric and eventually went bankrupt.