Warren Buffett said, “If our non-economic values were to be lost, much of Berkshire’s economic value would collapse as well.”
The Shanghai Composite Index has more than doubled over the past ten months. Parallels can be drawn to the US dot.com bubble, but even more excessive.
From a recent investor conference, it was clear that the business environment is the healthiest it’s been since the Financial Crisis.
As bottom up investors we prefer to focus on the characteristics that make a great business and the valuations that provide a margin of safety.
Further appreciation in the S&P 500 during 2015 will not only mark a precedent in historical price movements but a move further away from fair value.