ROE, defined as net income divided by shareholders’ equity, is massively distorted by the rise of intangibles. Net income has always been unreliable because of the considerable discretion management has in reportingexpenses within accepted accounting principles. Shareholders’ equity has also lost relevance because of the  vagaries of accountin... See more

More important, we own several businesses that possess economic Goodwill (which is properly includable in intrinsic business value) far larger than the accounting Goodwill that is carried on our balance sheet and reflected in book value. Goodwill, both economic and accounting, is an arcane subject and requires more explanation than is appropriate h

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