@mvkarthik
finally someone is asking good questions here. In past, I have tried many valuation models before, extensively and heavily on Indian firms, and all have their own cons and pros.. but the things is that once you get an intrinsic value (average of best speculative price as per the underlying business), you're pretty much a winner. But the problem with Berkshire hathway is that you cannot do this on every underlying subsidy of a firm(due to huge diversification and future uncertainties), this is more like evaluating an index where underlying assets changes quickly. so instead of going through whole business buffett has just wrote about an open source type valuation cum speculation model. consider this just as an projection model, which will not work on all businesses. It is not an effective way of evaluating small businesses, cash flow based valuations are still the best way of evaluating a business for general investors.