BRK buying back stock @ 110% of BV!!

[merkhet]

 

If BRK bought all of AIG, my understanding is that all of the tax assets would be lost - which represents a big chunk of value in the current AIG.  Is that correct?

 

 

AIG has about $30B of DTAs, but present value is probably only about 1/3 of that.  AIG has a book value of about $100B, but that doesn't count any of the DTAs.

[Charlie]

I love this quote:

 

"Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past."

— Charlie Munger

 

Cheers  :)

[RRJ]

I'm a buyer of BRK at these prices, in addition to what I already hold.  However, it occurs to me that something like this might be a preparation for a soon to be announced reduction in Buffett's responsibilities at Berkshire.  At this point, with Buffett's retirement at least partially priced in, a removal of that uncertainty might well help the price, but I would still bet on a further drop in price if and when he reduces his responsibilities.  I guess I'm just mentally holding some cash in preparation for that further opportunity to up my BRKB holdings to what I consider the full holding. 

 

Of course, pretty much everyone on this board knows that a reduction in Buffett's managerial duties (as opposed to capital allocation duties) would be pretty much meaningless to the company except for symbolic. 

[Valuebo]

No doubt that the stock is cheap, but it has almost always been (not to the same degree of course). So IMO, you can't assume a very high price to book in your valuation. It is also tough to see a catalyst as it is with almost any of my stocks. However, if the economy improves, BRK business and share price should do quite well from here.

 

- Why would we focus on market average valuations for determining value? It can be an indication but in the end the stock will sometimes be over- (mid 1998 & 2007 for example) and undervalued (2000, 2009 and 2011) just like any other stock.

- Do we need a catalyst at such prices? What is the likelihood of BRK being strongly undervalued for more than 5 years and what else but opportunity loss would you actually lose? Is it worth trying to time the market's behaviour? Not that I believe you are, I just don't agree with any need for a catalyst when buying companies of this quality.

 

Somehow people think Mr Market will suddenly be more rational towards Berkshire's future stock price, that Buffett will remain hated and that the markets won't turn manic again some day. (Not that I will wait for that day to sell my shares, there will be plenty of opportunity before that happens.)

 

Just trying to get some insight in other peoples reasoning. I appreciate each and every comment here.  :)

 

 

Of course, pretty much everyone on this board knows that a reduction in Buffett's managerial duties (as opposed to capital allocation duties) would be pretty much meaningless to the company except for symbolic.

 

Then why would you fall for the pitfall of trying to time such an event? It's just silly and not very value like imo. Timing seems hot lately, both for individuals stocks and the macro situation, and I don't get it.

 

What if Buffett is at the helm for another 5 years or longer and IV nearly doubles before the stock takes a hit from this event? It's just not a valid argument imo. If we do drop 10-20% because Buffett suddenly resigns then I'll just sell some common and start buying long dated calls because it would imply BRK is trading at 50-55c on the dollar based on my estimates.

 

Look what Apple's stock did after Jobs' resignation. I bet plenty of people thought it would go down as well and the MOS and general quality of the company is a lot less than Berkshire's at the moment. The longer it takes for Buffett to resign, the smaller the eventual opportunity loss will be in terms of performance as Buffett's extremely rare qualities will have lesser effect each passing year. And if you did a poll on the board some months ago I bet at least 50% would have believed Buffett would never buy back shares.

 

[JSArbitrage]

I'm a buyer of BRK at these prices, in addition to what I already hold.  However, it occurs to me that something like this might be a preparation for a soon to be announced reduction in Buffett's responsibilities at Berkshire.  At this point, with Buffett's retirement at least partially priced in, a removal of that uncertainty might well help the price, but I would still bet on a further drop in price if and when he reduces his responsibilities.  I guess I'm just mentally holding some cash in preparation for that further opportunity to up my BRKB holdings to what I consider the full holding. 

 

Of course, pretty much everyone on this board knows that a reduction in Buffett's managerial duties (as opposed to capital allocation duties) would be pretty much meaningless to the company except for symbolic.

 

I thought the exact same thing.  Considering this is the first buyback ever, I don't think this is a simple buyback due to general undervaluation.  This is a purposefully built floor for something major.  Maybe Warren reducing his duties; maybe a tax-free distribution of huge equity positions (KO, WFC, etc.)  But I find it hard to believe Warren just decided to do a buyback after all of these years and with such explicit restrictions.  Looks more like instructions than Buffett doing this for himself...

 

Maybe this was an idea pitched by the new portfolio managers?

 

 

[RRJ]

 

Of course, pretty much everyone on this board knows that a reduction in Buffett's managerial duties (as opposed to capital allocation duties) would be pretty much meaningless to the company except for symbolic.

 

Then why would you fall for the pitfall of trying to time such an event? It's just silly and not very value like imo. Timing seems hot lately, both for individuals stocks and the macro situation, and I don't get it.

 

What if Buffett is at the helm for another 5 years or longer and IV nearly doubles before the stock takes a hit from this event? It's just not a valid argument imo. If we do drop 10-20% because Buffett suddenly resigns then I'll just sell some common and start buying long dated calls because it would imply BRK is trading at 50-55c on the dollar based on my estimates.

 

Look what Apple's stock did after Jobs' resignation. I bet plenty of people thought it would go down as well and the MOS and general quality of the company is a lot less than Berkshire's at the moment. The longer it takes for Buffett to resign, the smaller the eventual opportunity loss will be in terms of performance as Buffett's extremely rare qualities will have lesser effect each passing year. And if you did a poll on the board some months ago I bet at least 50% would have believed Buffett would never buy back shares.

 

If he's there 5 more years and the stock doubles, then my already substantial position will do just.  As for "silly", I guess I'm just darn lucky I don't have to answer to you as to whether I'm a "good" value investor.  Funny how the world works out that way.  Jeez. 

[Partner24]

I'm not that surprised that much by that new announcement.

 

Stock is cheap. Business is in good shape. Enough cash on the balance sheet. Give them flexibility to increase intrinsic value per share.

 

But shareholders have red the news....

 

 

[gfp]

I'm a buyer of BRK at these prices, in addition to what I already hold.  However, it occurs to me that something like this might be a preparation for a soon to be announced reduction in Buffett's responsibilities at Berkshire.  At this point, with Buffett's retirement at least partially priced in, a removal of that uncertainty might well help the price, but I would still bet on a further drop in price if and when he reduces his responsibilities.  I guess I'm just mentally holding some cash in preparation for that further opportunity to up my BRKB holdings to what I consider the full holding. 

 

Of course, pretty much everyone on this board knows that a reduction in Buffett's managerial duties (as opposed to capital allocation duties) would be pretty much meaningless to the company except for symbolic.

 

I thought the exact same thing.  Considering this is the first buyback ever, I don't think this is a simple buyback due to general undervaluation.  This is a purposefully built floor for something major.  Maybe Warren reducing his duties; maybe a tax-free distribution of huge equity positions (KO, WFC, etc.)  But I find it hard to believe Warren just decided to do a buyback after all of these years.

 

Maybe this was an idea pitched by the new portfolio managers?

 

Have you seen Buffett lately?  He is not preparing to give up managerial duties, despite what Alice and the rest of the press seem to think.  He is still at the top of his game.  Berkshire isn't going to spin out equity positions either.

 

Warren was responding to the market price of Berkshire - he has stated many times that he views investments per share as having the utility of equity, so when we traded down to investments per share (much of which is not funded by float but owned by BRK outright), the market was valuing 75 non insurance subsidiaries for pennies.  Burlington Northern alone would sell for $40 Billion on a desert island today.

 

Everyone wants to read into this announcement - but it's all in the press release.  Buffett picks his words very carefully and he's been saying for a long time that Berkshire's IV is far in excess of book value.  Last week was the cheapest Berkshire has traded in the 15 years I've been paying attention - that's for sure.

[zarley]

Alice Schroeder on CNBC today implied something interesting about the announcement.  She thinks it may be another in several steps leading to Buffett stepping down as CEO, while retaining his position as Chairman.  The buyback would, in effect, place a floor under the shares in the event of a sell-off related to Buffett's change in engagement. 

 

It's clearly a theme for her, as she latched onto the use of retirement in the release announcing  Weschler's hire.  But, it does make some sense as a preparatory step in that case.    It ultimately doesn't matter much to me if the buyback announcement is simply price driven or driven by more complicated succession machinations.  It seems a welcome and sensible development either way.

[JSArbitrage]

Have you seen Buffett lately?  He is not preparing to give up managerial duties, despite what Alice and the rest of the press seem to think.  He is still at the top of his game.  Berkshire isn't going to spin out equity positions either.

 

Warren was responding to the market price of Berkshire - he has stated many times that he views investments per share as having the utility of equity, so when we traded down to investments per share (much of which is not funded by float but owned by BRK outright), the market was valuing 75 non insurance subsidiaries for pennies.  Burlington Northern alone would sell for $40 Billion on a desert island today.

 

Everyone wants to read into this announcement - but it's all in the press release.  Buffett picks his words very carefully and he's been saying for a long time that Berkshire's IV is far in excess of book value.  Last week was the cheapest Berkshire has traded in the 15 years I've been paying attention - that's for sure.

 

So why the restrictions? He basically laid out instructions on (a) the actual price floor and (b) the cash that is required to remain at Berkshire at bare minimum.  That is very unlike Warren.  Those look more like instructions to a third party.  Why wouldn't he just have the board approve of a boiler plate buyback and buy opportunistically?

 

Maybe he wants to be transparent in order to treat all shareholders fairly?  But this seems unusual to me.  It's all speculative of course.

 

[BargainValueHunter]

No doubt that the stock is cheap, but it has almost always been (not to the same degree of course). So IMO, you can't assume a very high price to book in your valuation. It is also tough to see a catalyst as it is with almost any of my stocks. However, if the economy improves, BRK business and share price should do quite well from here.

 

In terms of opportunities, I still think that Buffett should take a close look at AIG. I see a lot of value that could be created under the Berkshire umbrella with this really large insurance business. Float returns improvement, lower cost of funding and the ability to say no to poor underwriting would do wonders. This thing could be acquired for book, maybe less.

 

Cardboard

 

Not much Warren can do right now if he wants AIG. He would either have to do a deal with the Govt. or Berkowitz and I don't see that happening anytime soon.

[txlaw]

Have you seen Buffett lately?  He is not preparing to give up managerial duties, despite what Alice and the rest of the press seem to think.  He is still at the top of his game.  Berkshire isn't going to spin out equity positions either.

 

Warren was responding to the market price of Berkshire - he has stated many times that he views investments per share as having the utility of equity, so when we traded down to investments per share (much of which is not funded by float but owned by BRK outright), the market was valuing 75 non insurance subsidiaries for pennies.  Burlington Northern alone would sell for $40 Billion on a desert island today.

 

Everyone wants to read into this announcement - but it's all in the press release.  Buffett picks his words very carefully and he's been saying for a long time that Berkshire's IV is far in excess of book value.  Last week was the cheapest Berkshire has traded in the 15 years I've been paying attention - that's for sure.

 

So why the restrictions? He basically laid out instructions on (a) the actual price floor and (b) the cash that is required to remain at Berkshire at bare minimum.  That is very unlike Warren.  Those look more like instructions to a third party.  Why wouldn't he just have the board approve of a boiler plate buyback and buy opportunistically?

 

Maybe he wants to be transparent in order to treat all shareholders fairly?  But this seems unusual to me.  It's all speculative of course.

 

I think you may have hit the nail on the head.

 

WEB has been giving more and more information to shareholders in a very in front of your face way to let them determine the valuation of BRK.  This year's annual letter is an example of this.  It's possible that being included in the S&P 500 index also has impacted his decision on disclosure.

 

Unlike, say, an Eddie Lampert, WEB wants to be totally upfront with shareholders regarding valuation before cashing selling shareholders out at prices well below intrinsic value.

[original mungerville]

As a percentage of my portfolio, I had about a 70% notional long position in Berkshire before this morning (previously sold my KO to buy more Berkshire a few months ago, then sold my JNJ last week to buy more Berkshire).

 

Had and continue to hold another 25% in gold, 5% in gold miners, 5% Altius, and a 10% position in levered silver options and silver miner options. That total of around 115% long was hedged by puts on the Russell 2000 of 130% of my portfolio - so I was net short 15%.

 

Today I added Berkshire to go 100% long Berkshire, and sold 15% of my Russell puts. I am now long a total of 145% and short 115%. So I went from a net short 15% to net long 30% - a swing of 45% of the value of the portfolio which is significant.

 

I have seen this scenario before, in 2009 Fairfax was buying back Odyssey Re at $37. I was 100% long Odyssey rolling in-the-money calls with a strike at $30 while 100% short the Russell 2000 with in the money puts. While the Russell went down 50%, Odyssey Re just kinda' sat there at $37. Every once in a while it would go down to $36, 35, even low 30s I believe once and then would bounce right back to 35, 36, 37. In any case, I had 100% in there just not moving while the Russell collapsed. Watsa bought all of Odyssey back on the cheap (as one would expect from Watsa being a great value investors) for $65 a share or whatever (when I figure there is no way I would willingly sell for anything less than $85 short-term - and long-term I just would not have sold EVER).

 

In any case, the point of all this is for those concerned about a potentially large overall market drop here (me, although I am also concerned about the opposite force of monetary debasement), buying Berkshire now at these prices with the buy-back announced, while more expensive than Friday's price when looked at simplistically, is actually arguably cheaper than Friday's price when I consider that there is less of a need to hedge my long position with puts on an index. 

 

Not sure if this is interesting to anyone, but thought I would share. This is interesting to me as I take only a few large long and short positions with 15 to 25% in-the-money calls and puts typically to limit my downside. I don't recommend these complications to those with less than 10 years experience (and a good record) because leverage slices both ways and it gets really ugly really fast... but I do recommending trying to find ways to hedge yourself about some crazy potential outcomes we are likely to get in the coming years - ie either the stock market going down significantly or monetary debasement. And in this respect, with the buy-back announced and Berkshire only trading at $72 or roughly 110% of book at close on Monday, there is some potential upside but almost no downside (unless, of course, the bottom falls RIGHT out of the market and we enter a very severe debt-destruction/deflation) ...but there isn't much downside even with a 30% market drop and that is a DAMN GOOD risk-return trade-off in these markets short-term. In the long-term, of course, Berkshire should do very well relative to other US stocks from these levels. The risk-return profile is a no-brainer today even after the Monday close.

 

 

[original mungerville]

sorry ... I believe it was Odyssey (not Fairfax) buying back Odyssey shares at $37 back in 2009.

[biaggio]

some say that WEB has announced buybacks before but not has purchased a single share thus far.

 

I accumulated BRK.B to a good portion of my holdings (3rd highest) during the downturn since August + hope everyone is right about this putting a floor under the stock.

 

At the same time I hope the stock drops further at least temporarily so that I can buy some more + have WEB buy at lower prices. (This has got to be some sort of psychological defense mechanism).

[Cardboard]

"Not much Warren can do right now if he wants AIG. He would either have to do a deal with the Govt. or Berkowitz and I don't see that happening anytime soon."

 

A deal with the government could happen tomorrow morning. They want out and they hold 77%. I recall that Berkowitz has an average cost in the low to mid 30's so he would likely accept cash or Berkshire shares for say $40. Indeed, I think that he would be quite happy to get such proceeds with everything that has happened recently.

 

Regarding the tax assets, they are not on the books right now which understates book value as mentioned by Merkhet. The tax code mentions a 50% haircut to these NOL's if a change of control occurs. However, it is quite a bit more complicated than that with the value of the equity at the time of transaction being considered. So, based on my understanding, 50% is the worst case scenario. That is another asset that Berkshire could rapidly put to use while it will take a long time at AIG.

 

Regarding Berkshire, I did not mention that it would take a catalyst to make me buy it. The problem is that every time that Berkshire gets cheap, I find other companies much cheaper. On the other hand, they are much more risky. It is a risk/reward thing. With the help of some diversification, I tend to gravitate toward the riskier side. Over time, it has been rewarding, but I do get worried once in a while.

 

Berkshire would offer me a nicer sleep. However, if you think that Berkshire currently is worth 3 times book then I will sell everything and put all into it. I just don't think that is a reasonable assessment of its value. A combination of book, profitability and sum of the parts should give a decent view as to how much it is worth. I get something around $160,000. In a few years, it should be higher with whatever he does to increase IV.

 

And yes, I do factor in what I think the Street will be willing to pay. You can do a lot of fancy math and end up with a fairly high assessment of value, but unless someone is ever willing to pay such amount, you are fooling yourself. That is true for every company that I hold. That is also a reason why many value investors chose to sell their holdings at 90% of their calculated intrinsic value.

 

Cardboard

[merkhet]

 

I don't see BB accepting anything below $60. He certainly wants his warrants to go in the money. they are 10 year warrants. He would never accept a cash offer below their strike price with over 9 years remaining. I don't see AIG as warren's kind of company anyway.

 

 

I agree here -- Berkowitz likely sees value above $62, which is where the stock traded earlier this year, and I doubt that recent volatility for his fund as a whole would change his opinion.  FWIW, I estimate that AIG is trading for about 1/3 its intrinsic value, but I don't want to hijack this thread into an AIG thread or anything...

[twacowfca]

I love this quote:

 

"Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past."

— Charlie Munger

 

Cheers  :)

 

Or the short version: "There is a tide in the affairs of men which taken at the flood leads on to fortune."

 

--WS. :)

 

Guess where most of our cash pile has gone.  A free perpetual put about the current price or higher with a strike price that increases with the likely to be growing BV/SH of BRK in most years going forward.  It doesn't get any better than this.  This is not a short term trade!  What a "dividend" for shareholders!

[Valuebo]

http://seekingalpha.com/article/296012-berkshire-hathaway-s-new-share-repurchase-program-and-what-it-means

 

Tilson's take.

 

Outperformance seems almost obvious to me over a 1 year period. The question is by how much.

[seshnath]

Have you seen Buffett lately?  He is not preparing to give up managerial duties, despite what Alice and the rest of the press seem to think.  He is still at the top of his game.  Berkshire isn't going to spin out equity positions either.

 

Warren was responding to the market price of Berkshire - he has stated many times that he views investments per share as having the utility of equity, so when we traded down to investments per share (much of which is not funded by float but owned by BRK outright), the market was valuing 75 non insurance subsidiaries for pennies.  Burlington Northern alone would sell for $40 Billion on a desert island today.

 

Everyone wants to read into this announcement - but it's all in the press release.  Buffett picks his words very carefully and he's been saying for a long time that Berkshire's IV is far in excess of book value.  Last week was the cheapest Berkshire has traded in the 15 years I've been paying attention - that's for sure.

 

So why the restrictions? He basically laid out instructions on (a) the actual price floor and (b) the cash that is required to remain at Berkshire at bare minimum.  That is very unlike Warren.  Those look more like instructions to a third party.  Why wouldn't he just have the board approve of a boiler plate buyback and buy opportunistically?

 

Maybe he wants to be transparent in order to treat all shareholders fairly?  But this seems unusual to me.  It's all speculative of course.

 

I think you may have hit the nail on the head.

 

WEB has been giving more and more information to shareholders in a very in front of your face way to let them determine the valuation of BRK.  This year's annual letter is an example of this.  It's possible that being included in the S&P 500 index also has impacted his decision on disclosure.

 

 

Well, the rationalist in him must say that at his age, the actuarial probability is closer to 8% that he will die this year and it worsens by each years' passing.  I think the resolution is worded for that.

http://www.ssa.gov/oact/STATS/table4c6.html

 

Also, think about the largest seller in this market - BMG Foundation.  WEB donated the shares and how would it look if BMG gets less than book when it sells (assuming that is their clear strategy to fund the goals.)  I think this may have played a role as well.

 

Though I would have loved to buy more BRK, makes a lot of sense in the larger context.

 

[bmichaud]

http://seekingalpha.com/article/296012-berkshire-hathaway-s-new-share-repurchase-program-and-what-it-means

 

Tilson's take.

 

Outperformance seems almost obvious to me over a 1 year period. The question is by how much.

 

The following statement by Tilson is a nauseating reach:

 

"We interpret today’s announcement as not only a bullish statement by Buffett regarding Berkshire’s stock, but also about the markets in general because Buffett wouldn’t even consider buying back his stock if he thought there was even, say, a 20% chance that the world – and major stocks markets – were going to go off a cliff, as they did in late 2008 and early 2009. At that time, he was able to invest more than $50 billion at distressed prices, which Buffett much prefers to buying back his own stock, so Buffett is clearly saying that he thinks we’ll muddle through and that a major market correction is quite unlikely."

 

What the eff is he talking about? Any close follower of Buffett knows that he has a 100-year time horizon and does not time ANYTHING, but rather VALUES things. He bought GS preferreds in 2008 prior to the market bottom falling out in early 2009 - Buffett buys when he sees value, no questions asked. This says nothing about his view of the market in the short-term, and if anything, it says he does not currently see value in the marketplace. There are plenty of franchises out there large enough to soak up huge amounts of BRK capital, but at the right price - obviously Buffett does not see the right price at the moment (outside of WFC, obviously - but he is probably close to his limit on how much he can buy of WFC).

[Valuebo]

I agree bmichaud. As I have stated in another thread I'm not the biggest fan of Tilson but his basic thesis for a lot of his picks makes a lot of sense. I think here too he will be proven correct.

 

I disagree with the conclusion being made by some now that Buffett doesn't see (any) value in the market. He is hunting $5 billion+ elephants, excluding all without competitive advantages etc., excluding things he doesn't understand like tech,.. and he IS adding in his current and new stock holdings. What is he supposed to do, buy $20 billion more in banks?

 

It's just a luxury problem really.

 

 

Well, the rationalist in him must say that at his age, the actuarial probability is closer to 8% that he will die this year and it worsens by each years' passing.  I think the resolution is worded for that.

http://www.ssa.gov/oact/STATS/table4c6.html

 

 

I love those charts. Used them a lot as well whenever someone was talking like Buffett wasn't here anymore already. The chances are getting high, very high, but there is also almost a 25% chance that he lives another 10 years. No guarantee, but imagine what could happen in 5, let alone 10 years! The longlivety of other value investors gives hope but I wouldn't take it into account. And sadly some leave us way to soon, take Peter Cundill for example.

 

But yes, he is definitely making serious moves to a Berkshire without him.

[Ben Graham]

Warren E. Buffett is and always will be a partner you can rely on forever more.

[Parsad]

all Buffett did was give him the Option of buying back his stock. He never said it was a certainty. Tilson doesn't make much sense here. Buffett knows that anything can and will happen in markets. If we do get a repeat of 2009 Buffett will just do whatever is rational "at the time". Sometime I wonder why people have to write something every time Buffett sneezes.

 

He sneezed?!  When?  I didn't read anything about it.  ;D  Cheers!

[Munger]

bmichaud writes -- italicized

[shadow=red,left]The following statement by Tilson is a nauseating reach:

 

"We interpret today’s announcement as not only a bullish statement by Buffett regarding Berkshire’s stock, but also about the markets in general because Buffett wouldn’t even consider buying back his stock if he thought there was even, say, a 20% chance that the world – and major stocks markets – were going to go off a cliff, as they did in late 2008 and early 2009. At that time, he was able to invest more than $50 billion at distressed prices, which Buffett much prefers to buying back his own stock, so Buffett is clearly saying that he thinks we’ll muddle through and that a major market correction is quite unlikely."

 

What the eff is he talking about? Any close follower of Buffett knows that he has a 100-year time horizon and does not time ANYTHING, but rather VALUES things. He bought GS preferreds in 2008 prior to the market bottom falling out in early 2009 - Buffett buys when he sees value, no questions asked. This says nothing about his view of the market in the short-term, and if anything, it says he does not currently see value in the marketplace. There are plenty of franchises out there large enough to soak up huge amounts of BRK capital, but at the right price - obviously Buffett does not see the right price at the moment (outside of WFC, obviously - but he is probably close to his limit on how much he can buy of WFC).[/shadow]

 

 

 

 

Nothing personal against Tilson but I very much agree with bmichaud. Tilson's comments sound almost hysterical/emotional.  And if the stock market did fall significantly, nothing in the press release obligates Buffett to buy BRK stock instead of better opportunities that may emerge in such an environment.  Buffett simply stated that BRK stock is currently priced well below intrinsic value. 

 

As a long term owner of BRK who expects to continue holding the stock for some time, I agree w Buffett's assertion...the only reason I personally don't say forever is because you never know when/if better opportunities will emerge for the capital -- but to date, I have never sold a share of BRK...in fact, recently purchased more shares.