Depreciation charges are a more complicated subject but are almost always true costs. Certainly they are at Berkshire. I wish we could keep our businesses competitive while spending less than our depreciation charge, but in 51 years I’ve yet to figure out how to do so. Indeed, the depreciation charge we record in our railroad business falls far short of the capital outlays needed to merely keep the railroad running properly, a mismatch that leads to GAAP earnings that are higher than true economic earnings. (This overstatement of earnings exists at all railroads.) When CEOs or investment bankers tout pre-depreciation figures such as EBITDA as a valuation guide, watch their noses lengthen while they speak
–wrote Warren Buffett
Most Indian financial advisors actively discourage their clients from buying homes-they rather that their clients invest in equity.
It is interesting to know what Warren Buffett said recently:
In Mr. Buffett’s opinion, if you are going to be settled, it’s a great idea to buy a home. If you know you are going to be there for 10 years, you should buy. His daughter is 61 years old and loves coming home as it represents continuity in life. He feels that this is a good time to buy a home, but he can’t imagine owning 10-12 homes.