BRK Book Value Feb 2018?

[Cigarbutt]

Basic notions in a sense but truly fascinating.

Statutory accounting rules has historically focused on the solvency aspect of the numbers but that's been changing.

It would be reasonable to conclude that book value as generally reported now is closer (?) to fair or intrinsic value.

In the last 20 to 25 years, in general, the market price to book "gap" has increased (especially the market to tangible) but specific reasons could explain that: larger buybacks, technology, more industries now characterized by an intangible "edge".

Bottom line: despite what Mr. Benjamin Graham was saying decades ago, book value as reported these days, in general, has a poor correlation with "market" value appraisal.

 

What is nice with BRK and many others, because of the nature of businesses assembled and the "culture", reasonable efforts can result in a fairly precise adjustment to book value. Of course, in a group exercise, the final number may vary but, if done in a value-based forum, maybe, the efficient theory may apply here to some degree. :)

 

At the end of the day though, derivation of an adjusted book value remains an individual exercise.

 

That can involve financial notes, fancy math, comparables etc. But, at the end of the day, the premium you pay should correlate to the actual amount that you would pay for the whole company if you were a private investor.

 

Theoretical exercise with BRK, but potentially rewarding nonetheless.

[ValueMaven]

BV is currently $141

 

1.2x equates to $170,

 

at $210 brk.b is only trading at 1.5x BV currently...

 

very, very rough math - but should help some ppl out