Excellent article on Brookfield asset management/bruce flatt

[scorpioncapital]

http://www.bwob.ca/industries/real-estate-industries/a-perfect-predator/

 

Another worthy conglomerate

[biaggio]

Thanks, enjoyed article.

 

What metric do you use to value BAM?

 

Appears to be selling at a ~ 60% discount to BV according to http://www.gurufocus.com/financials.php?symbol=BAM, while free cash flow + earnings are all over the map.

 

12-15% grower i would think it should sell at 1.2-1.5 x BV for high quality assets + good manager/asset allocator? Is this in your line of thinking?

 

Thanks again

[beerbaron]

I love BAM and Flatt but the business structure is so complicated. If I were to invest in Real Estate and utilities I would do it trough them, Flatt is a very good Jockey. It's current price is attractive tough.

 

BeerBaron

[scorpioncapital]

It's a good article but I would disagree about this point:

 

'Berkshire Hathaway is a company centred on Buffett’s grandfatherly persona, he observes. “Companies that are about one person, it’s not a good thing,” he says. “Jack [Cockwell] became a brand in his own right, and it became a problem for him and for the company.”

 

I think people underestimate how *independent* of Buffet Berkshire has become. The only logical conclusion is that Buffett is the alpha-capital allocator but then what is Flatt saying? He's saying capital allocation can best be done in groups (notice the hundreds of people they sent in on any given deal and the 15 at the top). But some would argue against this, some would even say Flatt was instrumental in many of the decisions.

 

I like BAM, they even publish a measure of the intrinsic value of their stock each quarter. I am not sure, however, what sort of return I should expect from it in relation to other big conglomerates, Berkshire included.