JBird

Thanks to Heilko for finding this SEC link. http://www.sec.gov/Archives/edgar/data/1067983/000119312513109017/d467360ddef14a.htm It shows that Warren owns just under 40% of the outstanding Class A stock.

Does anyone have an estimate of what the transactional cost to Berkshire would have been to acquire and sell $5 billion of GS stock on the open market?

I use the two-column approach to valuing Berkshire. I value Berkshire's portfolio at 100 cents on the dollar and its non-insurance operating earnings at about 13x after-tax earnings. My estimate is that the A shares are worth around $190,000. I rounded up to 200 for the sake of simplicity. If you're trying to reach a conclusion about the price of Berkshire in 10 years or so, would you look to something other than Berkshire's value? To your second question, Berkshire cannot compound at 17%+ for 10 years because the capital base is too big. Its investment portfolio will not grow at that rate, and neither will growth in non-insurance operating earnings (though it won't be far off). Please don't take what I said as a personal criticism. - J.D.

Think about the quantitative implications of your question. If the intrinsic value of the A shares is currently around $200,000, what would it take for that value to get to $1,000,000 in a decade? Intrinsic value would have to grow at 17.4% per annum. Of course, Berkshire management knows that's an impossible feat. A great question.

Anyone find the proxy statement that mentions this $50,000 check Buffett wrote?

I find that valuation both reasonable and rational.

You did not need to know BRK's value when it was trading at BV to know it was trading well below IV and a great buy. Why is that?

Palantir, why did you buy a security without knowing its value? Why are you asking other people to value it for you?

What's your investment hurdle rate? 10% is the figure we quit on -- we don't want to buy equities when the real return we expect is less than 10%, whether interest rates are 6% or 1%. It's arbitrary. 10% is not that great after tax. Charlie Munger: We're guessing at our future opportunity cost. Warren is guessing that he'll have the opportunity to put capital out at high rates of return, so he's not willing to put it out at less than 10% now. But if we knew interest rates would stay at 1%, we'd change. Our hurdles reflect our estimate of future opportunity costs.] We could take the $16 billion we have in cash earning 1.5% and invest it in 20-year bonds earning 5% and increase our current earnings a lot, but we're betting that we can find a good place to invest this cash and don't want to take the risk of principal loss of long-term bonds. Source: BRK Annual Meeting 2003 Tilson Notes Wellmont- Explain if you could your last comment. Do you mean to say the index is overvalued, or should not be priced significantly higher? Would you disagree that interests rates are to financial instruments as gravity is to physics?

Are you able to (roughly) quantify the intrinsic value of the index?

Parsad: What do you believe is a reasonable value for the S&P 500 (or perhaps a range of values), given its present/future earning power and interests rates at 2%?