ValueMaven

I thought Berkshire cant own more then 10% of a bank - without Berkshire being classified as a bank holding company from the FED. News out this morning that Berkshire boosted its stake in BofA to over 11%. Thoughts??

Munger has commented on a similar way of approaching the question a number of times. I noted one time he mentioned this maybe a week ago when I was watching an annual meeting on the cnbc archive. I think I tweeted about what year it was. I will see if I can find it. He also has said before (essentially), "It used to be like shooting fish in a barrel, you could buy Berkshire below the book price of the marketable securities and get the insurance and the other wholly owned subs for free." Yes - would be interested in seeing this ... Thx

Chris Bloomstrain from the Manual of Ideas on 3/26 'Berkshire is a big position for us, and I think they’re in pretty good shape. That’s the proper way to think about it. When I think about Berkshire — I said it at the year end — they had about $42 billion in economic earnings. That includes $3 billion for the optionality of the cash, and everybody can make their own decision about that, so $40 billion. It won’t be $40 billion this year, but discounting 2021 and beyond, I think $40 billion is right. When the stock traded at a market cap of less than $400 billion, I don’t recall a time that Berkshire has traded at 10x what I would call normalized earnings. It’s got a fortress balance sheet, and it’s got a lot of businesses inside it that are about as well protected against the downturn as you can have. It made no sense to me that the stock traded at 160.'

This is a great topic actually. Personally I've allocated to BAM vs. BX - as BAM is cheaper IMHO, and better hands-on operators. Way better credit (oaktree), infrastructure and renewable businesses vs BX. Yes, they are over-allocated to retail and office....that is a sore spot for sure. BAM insider ownership = $10B, while BX is sub-$1B. In fact: Jon Gray (co-president) only owns $75M w/of stock.

My hesitation is that it values cash and equities at 27 times peak-cycle cash/equity earnings of approx $14 billion. A 3.7% peak-cycle earnings yield. how does that value cash and equities at 27x p/e? I dont follow ... fine - apply a 50% discount and its still cheap. I'm just saying this is one of several interesting ways to value BRK

The Rational Walk on twitter posted this and I totally agree with this approach...its neat way to value BRK: 3/31/20: Cash & Investments = $349.5B + $33B gain in Q2 = $382B vs. Market Cap of $427B Implied Value of $45B for non-insurance wholly owned subs (BNSF, GEICO, Clayton, PCP, Utility etc etc) .... man this thing is CHEAP He also pegs P/BV at 1.08x Thoughts? It's an interesting way to triangulate valuation

Can we take this back to the specific topic thread of VALUATION I have Fair Value pegged at $260 - $280 currently. Would love to know what others think around valuation. It seems like the Street is giving little credit for the Operating Income at the parent company more broadly.

thank you for starting this topic - this is the cheapest BRK has been in a VERY LONG TIME. Trading below 1.2x BV. Operating Biz will likely earn $23-$24B this year as well... also think about Apple... Berk is up $50B+ in Apple -- it is now basically 21% of Berk. A simple way to value Berk = Operating Income + Investments + Cash ... throw a below market multiple on the N.I, and you can see how cheap it is here. You can do things like SOTP etc - but that is a bit more complex and in the weeds IMHO What is the catalyst to drive value higher??

Question: roughly how cheap was FFH trading when Prem bought? price to tangible BV? price to normalized earnings?

Good for Prem ... the more I thought about this - the more I liked it!!!! I really wish WEB did something similar w/Berkshire. IMHO Berkshire is cheaper then FFH

Announcement just hit - Prem has acquired about $150m worth of Fairfax shares in the open market!! Way to step up!! He is now calling Fairfax ridiculously cheap.

Bought more just below $180. Seems like 99/00 to me when Berk became extremely cheap. Interesting confluence of many events: rails all-time highs, GEICO booming, APPL all-time highs, insurance pricing improving, stability of uts....yet sitting on a ton of cash, banks underperforming, equity portfolio is mixed. Frankly, I have FV pegged at $240 - $260 currently. By my estimation BRK is trading below ~1.2x BV, more like 1.15x currently. Apply a reasonable multiple to the earnings (below market), add back investment-per share and I think you get a fair target for where it should be trading. In terms of next acquisitions - I dunno - Oaktree would have been extremely interesting to buy - but not typical BRK; something countercyclical? WEB mentioning how $130B in cash is not high for worst-day outcomes was a really bad comment IMHO....Dont break it up - but start a small divy policy...esp given how stable the operating biz's have shown to be. Others - thoughts??

Bought a decent chunk below $168 this morning !! Trading below 1.1BV by my estimates right now ... cheers!

ETP-PD and ETP-PC are two MLP preferreds which are getting serious whacked right now. These are $25 pars - trading in the low-$12 range. What are the pros and cons of MLP Preferreds? Do they issue K1s? ETP's equity is down about 20% right now - but does have a $25B market cap and is lead by Kelcy Warren - who is well known in the MLP space. These might be interesting 'defensive' preferred securities trading 50% of par ValueMaven

Was able to pick up some Berk at $180.40 on Thursday ... I think I got lucky

Trading at x0.78 of BV? What am I missing?

Thx!!! No brainer for the LT investor below $200

What is Book Value for the B-shares ???

It posted .... alll 128 pages - of which Berk is about HALF the letter. Best analysis out there on Berkshire ... his valuation targets are extremely interesting

Extremely poor analysis. I read it again (waste of my time) ... nothing was mentioned on the quality of management, the diversification of businesses, or frankly WEB's homerun in apple recently. I get it - there is a limited amount of space to write...however this was a poor article. Omitted large portions of BRK's overall valuation as well ... the funniest was on the margin side -- ie: GEICO's margins stick vs PGR -- not mentioning the huge market share growth b/c of advertising etc. 'We like to think that Barron’s provides the best coverage of Berkshire anywhere.' --- LOL

really horrible write-up on Berkshire in Barrons this weekend as a cover story. Basically calling for a breakup and a dividend...one of the worst piece I've seen on Buffett and Berkshire for sometime. What did others thing who read it?

I'm giving all 4,500 pages a shot in 2020 ... need to figure out how not to read all of this on the silly screen. Excited + Scared.

AAPL and Cash = nearly 40% of Berk at this point ... insane!

Isnt AYR trading above the $32 per share takeout offer? what am I missing here?

Say what you want about WEB - but he nailed Apple. One of his best investments!