Analyzing Capital Expenditures-Buffett and Sears Case Study

A reader asks about calculating capital expenditures and Buffett’s owner’s earnings.  I believe only maintenance capex is deducted in determining owner’s earnings not growth capex because maintenance is mandatory while growth capex is discretionary.

This document is 11 pages and it includes other links.

3 responses to “Analyzing Capital Expenditures-Buffett and Sears Case Study

  1. Oh man, “”If you want to beat the S&P 500, here’s what you do, you buy 500 stocks, and then you sell the airlines. Youshould do better.” – Tom Gayner” Worth the price of admission alone!

    BTW, have I forgotten to tell you lately what a great job you’re doing with this blog?

  2. Karthik Rajeshwaran

    Thanks a ton for this post John.

    I had major conceptual cobwebs around why we subtract only maintenance capex as part of the Owner’s Earnings calc.


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