Have you ever wondered how to value a business? Did you ever study the process? Buffett gives his ideas about Petrochina valuation in the following video. One thing I learned a long time ago is to study the deals. I have often found it wise to analyze Buffett moves to better understand his valuation and investment process. It is very rare that you will hear Buffett talk directly in such a public setting about his calculations of value. Hopefully, some of you might study his thoughts on valuation and see how his calculations compare to your own.

Buffett gives you a helping hand here... click here

BGF

Some comparative figures for the video:

 GE:

Mkt Cap: 417B
Rev: 163B
Inc: 20B
BV: 112B

XOM:

Mkt Cap: 527B
Rev: 377B
Inc: 39B
BV: 113B

PTR:

Mkt Cap: 448B
Rev: 91B
Inc: 19B
BV: 77B

All numbers are from 2006 for comparison purposes and to give each company the benefit of the full year. Some companies my have had special charges that would influence ratios to earnings and book value, I did not check. None of these figures represent future cash flows, but I would imagine for the most part PTR and XOM would suffer similar fates.

BGF