Are you a Berkshire Hathaway Inc. investor?

[Guest longinvestor]

An idea triggered by Munger’s comment in the 50th year letter, “The stuff we have now is enough” had me come up with NPV’s of future cash flows under various scenarios; staying flat at current rate for aa decade; growing modestly and then flattening out; and of course  various discount rates. Under all assumptions the price was lower than value. This was in 2015, I think. Berkshire ‘s value has marched on at some of my aggressive assumptions. I plan to do this again this May.

 

Yep - I have not done the exercise outside of my mind but that is what I concluded the result would most likely be.

 

Everytime someone says that "Buffett's age is the risk" I think, well if he died tomorrow and they started such a runoff, it would probably increase the speed at which Berkshire's value is "realized".

 

Regarding buybacks vs. dividends -

Once Warren is gone, I prefer dividends. I don't trust the next guy to buy appropriately.

While Warren is alive, I prefer neither. I'd rather give him as much opportunity to find another elephant.

 

I actually think that Buffett has addressed his age/transition for a while now. I would like to think that a big chunk of the capital allocated over the past decade (some $100-150 B) has been in the hands of someone other than himself. Ajit and Greg have been solo for a long time, so are all the subs. T & T are there (as Buffett has stated multiple times ) to support capital allocation at the subs. Todd brought PCP to the table etc.  I'd venture that either Todd or Ted even had a hand in the Apple investment. Mentoring for 10 years ain't shabby at all. By the time announcement makes the headline, it would be mere formality. 

[John Hjorth]

Conclusion so far: Berkshire - A CoBF darling!

 

Right now I see five CoBF members with a gross position above 100 percent. At least to me, that's ballsy!

 

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This post is also meant as a friendly bump - the poll is still open, for those members who haven't taken it yet!

[scorpioncapital]

I use the training wheels model. I was at like 80% brk for equity portfolio, now down to 40%. The 40% that went down was put into other high quality companies at what hopefully was a decent price that didn't overlap with anything held inside brk equity portfolio. I don't see BRk doubling quite as fast as other potential opportunities. No fault to berkshire! But what can one do? it's a good but difficult problem.