return on tangible equity

**zhiyuzh** Sat Mar 29, 2008 3:54 pm

return on tangible equity
Can someone give me an example of what's as 20% return on tangible equity ?

thanks!

"We’ve invested in and owned banks. If 20 years ago you’d asked me whether it was possible, in a world of 4.75% bonds, that countless banks would earn 20%+ returns on tangible equity, I’d have said no. In part this is due to leverage. A 1.5% return on assets leveraged 15 times is a 22.5% return on equity. But even so, you’d think once everyone was doing it, return on assets would drop to 1%, but it hasn’t happened yet."

http://seekingalpha.com/article/35891-whitney-tilson-s-notes-from-berkshire-hathaway-s-annual-meeting