Mar. 26 at 10:04 AM
$MSFT — “Expensive” is a relative term. Let’s look at the comp.
Today:
MSFT EV/EBIT ≈ 31.2x
KO EV/EBIT ≈ 24.5x
Now rewind: Berkshire bought
$KO from 1988–1994.
First purchases at ~10x EV/EBIT. Final buys in summer 1994 at ~17x.
The “expensive” tranche (17x) still delivered ~8–9% annualized. Slightly lagged the market, but compounded for decades.
Apply that lens to MSFT today at 31x.
Is it “expensive” vs KO’s 17x back then?
Different rates, different moats, but the principle stands:
✅ High-quality franchise
✅ Pricing power
✅ Capital allocation compounder
The multiple may compress near-term, but long-term owners who bought KO at 17x didn’t lose. They just waited.
MSFT is not a trade. It’s a business.
