With Dempster Mill, Buffett encountered just such a situation. In 1961, its book equity was $76, making the stock look ridiculously cheap at $28, at least on paper. Watching Buffett skillfully mark down Dempster’s assets is a good chance to watch him in action as he conservatively assesses true market values line by line. Here, even after his markdowns, Buffett found the stock was still exceedingly cheap.
