Warren Buffett

Any investor would love to park money, for the long term, in sustainable growing businesses managed by talented executives. Warren Buffett had discussed moats around business as well as outstanding managers over and over again in his talks as well as in his letters to shareholders. 

According to him, book value is just a historical number and it does not indicate the true value of a business. Book value is what has been put in, intrinsic value is what can be taken out. What really counts is the gain in per-share business value, not book value. Nevertheless, in the case of Berkshire Hathaway, two valuations tracked rather closely, with the growth rate in business value over time somehow matching with the growth rate in business value. For other corporations, in many cases, their book values and their business value were much unrelated. Buffett has pointed out the example of LTV and Baldwin-United reporting the book value amount of $652 million and $397 million respectively just before they went bankrupt. In contrast, Belridge Oil, the famous situation that Charlie Munger mentioned in his talk, got its book value at $177 million, and was acquired by Shell in 1979 for $3.6 billion, 20 times its book value.