Many friends think that this sentence is very empty, what is the growth of intrinsic value? How to show it?
When I gave an example to my friends, my friends instantly understood what example it was.
First of all, the term intrinsic value first appeared in Buffett's letter to shareholders. So what is the intrinsic value of listed companies? Let me give you an example of Coca-Cola held by Buffett.
Buffett bought 14.17 million shares of The Coca-Cola Company at a cost of 59.3 billion in 1988, accounting for 4% of Coca-Cola’s shares. Suppose that after Buffett bought it, Coca-Cola ceased to go public. So what will happen to the Coca-Cola Company thirty years from now? Thirty years later, 2017.
Coca-Cola's dividends reached 6.32 billion. Assuming that Buffett has not increased his holdings of Coca-Cola's shares in 30 years, then he holds 4% of Coca-Cola's shares. In 2017, I was able to get a dividend of 252 million yuan, which means that the initial investment of 59.3 billion yuan will have an annual investment return rate of 42.5 million after 30 years. Such a high rate of return is enviable.