Lemsip

Does seem to be a typo. I get similar figures from the 10-K after tax earnings seem to have gone up about 28% but the pre-tax number is 10% according to my calculations as well. 2018 2017 Railroad 6863 6328 Utilities & Energy 2472 2499 MSR 12308 10927 Total 21643 19754

Thanks for the link. Do you know of any such resource to backtest European stocks as well? (The available stocks seem to be restricted to N. American companies) Some european companies have US listed ADRs so you can use that if it works. Also, stockcharts is pretty good for that ( use the perfcharts option) and is one of the few out there that allows you to pick shares including or excluding dividends. I am Europe based as well and these 2 work for large, well known shares but I don't know of any others which include small-cap or less well traded exchanges.

Actually if you use portfoliovisualizer and compare an investment in Berkshire vs the Vanguard S&P 500 benchmark, Berkshire is significantly ahead starting 1998,1999,2000 and so on even as you say the valuation has compressed. https://www.portfoliovisualizer.com/backtest-portfolio

A number of comments here about Berkshire underperformance. This of course is very sensitive to the end points used. As measured at the end of the last calendar year, Berkshire had beaten the S&P by 7 points the previous year and then starting Jan1 of all years since 2010. So far in 2019 we have had a 2.5 month period where Berkshire has flatlined while the S&P has shot up so using the current date as the endpoint gives a different result. Through a strategy of building up my position when Berkshire has been attractive ( 2011, late 2015 and lately), I have had a modest edge on market returns since 2004 in my personal portfolio. I think 10%-11% from Berkshire from current prices is a reasonable expectation and more importantly the range of outcomes is narrower than for the average firm. There is no chance of it shooting the lights out but also the safety factor makes it a reasonable candidate for a chunk of the portfolio that will survive adverse periods from a position of strength. Cash build up and usage is an issue but there are companies with bigger market cap than Berkshire which are also operating and growing reasonably well with a similar amount of cash ( Alphabet has $110bn , Apple double that). It will take time for Berkshire to return cash but any effects of that will need time to work through. I am encouraged by specific moves to relax the weird book value criteria last summer and the start of buybacks.

Looks interesting and good work. I have not yet digested the whole thing but at first glance I think it looks over conservative. You are valuing at $202 per B share whereas Buffett, chronically reluctant to repurchase unless there is a huge discount to IV- has been buying shares upto $207.9 in the recent past. Also Ajit Jain recently put down $20m of his own money at $198 per B. Neither of these would happen if their general valuation was not somewhere in the $240-260 per B range which is also the general range from Semper Augustus using 3 different methods.

If this happens, Berkshire will continue to chug along and outperform S&P upward too - and with 25% cash. From what I've seen it has kept up with SP and a little bit plus. Spot on. Reading a lot of commentary, you'd almost miss the fact that through Jan 1 2019, BRK has outperformed the S&P by a hefty margin each of 1,2,3,4 and 5 year time frames all the time keeping solid firepower, a defensive approach and outstanding business results.

Agreed and it would be good to see them discuss issues of corporate capital allocation in general, not just operational performance of their respective businesses.

Hi guys, First time poster but a long time reader here. I am one of those in the 35-40% bracket with Brk. I have increased the proportion recently bearing in mind a few developments : - A current price which more than compensates for any negative post-Buffett risk - More flexible ( and I would argue more rational ) buyback policy. - Buffett buying back stock at $207 and Ajit jain buying 20m worth on his personal account at $197 per B ( where it trades today) - Management with skin in the game ( Ajit and Greg have most of their net worth in Berkshire with shares bought in the open market). Obviously the core business is as bulletproof as it gets and is being managed very rationally. All the issues regarding Buffett's eventual passing are well known, widely discussed and any negative scenarios are already priced. What is arguably not priced is any positive developments from the next generation of management who might execute better than Buffett. As the market is neither widely discussing nor pricing this eventuality, at the current price I think it is a good bet.