"Warren Buffett's Advice for Smarter Investing: Avoid This 'Worse Than Useless' Metric"

1 min read
Source: The Motley Fool
"Warren Buffett's Advice for Smarter Investing: Avoid This 'Worse Than Useless' Metric"
Photo: The Motley Fool
TL;DR Summary

In his annual shareholder letter, Warren Buffett criticizes the use of net income as a metric for evaluating companies, calling it "worse than useless." He advises investors to focus on operating income instead and to consider the impact of unrealized capital gains and losses on a company's financial statements. Buffett emphasizes the importance of evaluating businesses rather than stocks, cautioning against relying too heavily on metrics like EBITDA and urging investors to thoroughly analyze a company's financial statements over time before making investment decisions.

Share this article

Reading Insights

Total Reads

0

Unique Readers

1

Time Saved

4 min

vs 4 min read

Condensed

90%

80184 words

Want the full story? Read the original article

Read on The Motley Fool