What are you buying today?

[Mephistopheles]

BRK at 1.4 x book, but the earnings multiple is what makes it cheap. 

 

Just being lazy, but Union pacific market cap is ~$150 billion, and the book value for BNSF is $50 billion. If you adjust the book value to reflect that, we are at like 1.25x 

 

 

[Valuebo]

The biggest argument for buying BRK currently is simply that it's generally a very good hedge when the market gets frothy and will fare better in a min extended downturn. Esp when you have more capital over time, you get to sleep a lot better having a good chunk in brk, but that's just me.

Edited April 22 by Valuebo

[Mephistopheles]

Something tells me Greg will be more aggressive with buybacks vs. Buffett. Love the old man but I think he was way too conservative since COVID. For example, selling Apple IMO was just inexplicable.

[Eldad]

2 minutes ago, Mephistopheles said:

Something tells me Greg will be more aggressive with buybacks vs. Buffett. Love the old man but I think he was way too conservative since COVID. For example, selling Apple IMO was just inexplicable.

I agree. That’s honestly all he has to do is be rational and aggressive when called for with the buybacks. 

[John Hjorth]

21 minutes ago, Eldad said:

I don’t think it’s super cheap. It’s back to a good deal and I have a bunch of cash and am totally fine to make 10-12% in this crazy era. ...

 

8 minutes ago, Eldad said:

Also, the buybacks, prior to Greg’s new one, averaged 1.44x book. That was what WB considered a “substantial discount to IV”. I know BV isn’t perfect but we are now in the 1.39 range so it’s a little better than a fair deal for the buyer IMO. 

 

I think like you do here, @Eldad. 

 

If you want to shoot for the stars, go somewhere else. Perhaps even a 8 percent return may not make me whine. Even a turtle gets forward, if it's persistent, over time.

[tnathan]

5 hours ago, thepupil said:

can you all lay out some math why Berkshire cheap? I see ATH in terms of cash / assets. ATH in terms of stocks / assets.  Deleveraging and becoming more liquid as they made money in stocks and sold those. cash is worth cash*. stocks, absent big undervaluation are worth stocks. none of the large positions are freshly bought and are at far higher multiples than when bought. you can mark up BNSF, BRKHEC as you please and assign some value to the insurance franchise....I'm just not getting much higher than current doing the usual berkshire adjustments.

 

said as much on twitter...a few people agreed...a few people insulted...no one showed math that got 20 or 30 or 40% higher price. 

 

Berkshire is basically at its average P/B of the last 15-20 years. I would argue it should trade cheaper than it has because of buffett closer and closer to the end and the enormity of reinvestment risk...of course if berkshire is actually cheap, then easy button capital allocation is just buy back stock

 

 

*this is where the devoted quote buffett re optionality of cash or say cash is worth more in buffett/abel's hands

+1

[Eldad]

@tnathan @thepupil

 

I have operating earnings plus look through on BRK at about $30 a share. It has grown earnings over 10 years at 12.3% a year and 11.8% over 5. So you have a stock at 15.5x growing at 10 plus that is also the safest company in the world. 
 

I mean CSU and the insurance brokers are maybe a better combination of growth and value right now. CSU has major uncertainties in my mind and the insurance brokers are better on the uncertainty but are far less safe than BRK. 
 

What other names would you suggest? 
 

 

[petec]

On 4/22/2026 at 8:04 AM, Sweet said:

Real soccer fans call it football, the other game is a load of dudes on steroids playing pass the hand egg.

 

And neither of them can hold a candle to rugby 

[thepupil]

12 hours ago, Eldad said:

@tnathan @thepupil

 

I have operating earnings plus look through on BRK at about $30 a share. It has grown earnings over 10 years at 12.3% a year and 11.8% over 5. So you have a stock at 15.5x growing at 10 plus that is also the safest company in the world. 
 

I mean CSU and the insurance brokers are maybe a better combination of growth and value right now. CSU has major uncertainties in my mind and the insurance brokers are better on the uncertainty but are far less safe than BRK. 
 

What other names would you suggest? 
 

 

 

hmmm, I'm just not seeing either that level of earnings or that level of growth. Will have to double check my #'s and report back.

 

if i thought earnings would grow 12% for next decade, i'd feel very differently. 

 

I see earnings growth 2017-2025 as 

MSR: 5.5%

BNSF: 0.7%

BHE: 6% 

 

Insurance Inv Income: 15.5%

Insurance UW Income: 25%  

 

to me its about where the growth is coming from and repeatability of that. 

 

Basically I see the large private operating businesses as relatively low organic growth businesses with the two capital intensive ones having faced headwinds (BNSF declining PRB coal, structurally lower mgns to UP and BHE various regulatory battles)...BHE retains all earnings (last 10 years $73B of OCF to $76B of capex) and still seems to grow by 5-6%....i caveat this with it's hard to really know because i assume there's earnings power on the come at BHE

 

what has exploded is investment income as we've moved from the zero bound on rates and cash yields something and we're in a great period of insurance underwriting, the most volatile, lowest multiple source of earnings at berkshire. like think about berkshire's investment in apple. $50B of cash becomes like $150B of cash and $60B of apple (these are swagged/incorrect), so your cash earning zero became $150B of cash making $6 billion and $60B of apple making a low divvy yield...investment income would show really high grwoth in there. 

 

i'm also kind bearish of the stock portfolio which trades at 20x forward and has done 18%/yr last 3 yrs on a wgt avg basis. like its fine, but if there were closed end fund that owned $320B of this portfolio and had a $50B DTL attached to it that prevented turnover, i'd probably want a 10-20% discount. 

 

basically on fwd looking basis, i see the private businesses as low ish growth/fairly valued. the public portfolio as fairly valued. insurance seems to be at cyclical peak (to the dilletante writing this).

 

I've been wrestling with this a fair bit in that i owned berkshire for 14 years often as biggest position, it's at roughly the average valuation of those 14 so i feel like i should like it, but i can't quite figure out if it's me who has changed (too much time slumming it in cheapo deep value nav play land...my normal stomping grounds...or if its berkshire that's genuinely changed....all i know is reinvestment risk/opportunity has never been higher given cash as % of assets. 

 

one thought i had where may be wrong is if you have a bunch of housing related stuff in the operating co's, BNSF at a local trough, BE with LT capex about to bear fruit, perhaps there's an element of coiled spring in the operating subs...ie the trailing growth of those look bad becaue we're at not great part of cycle for those things (the opposite of insurance)...

 

 

 

 

Edited April 23 by thepupil

[73 Reds]

17 minutes ago, thepupil said:

 

hmmm, I'm just not seeing either that level of earnings or that level of growth. Will have to double check my #'s and report back.

 

if i thought earnings would grow 12% for next decade, i'd feel very differently. 

 

I see earnings growth 2017-2025 as 

MSR: 5.5%

BNSF: 0.7%

BHE: 6% 

 

Insurance Inv Income: 15.5%

Insurance UW Income: 25%  

 

to me its about where the growth is coming from and repeatability of that. 

 

Basically I see the large private operating businesses as relatively low organic growth businesses with the two capital intensive ones having faced headwinds (BNSF declining PRB coal, structurally lower mgns to UP and BHE various regulatory battles)...BHE retains all earnings (last 10 years $73B of OCF to $76B of capex) and still seems to grow by 5-6%....i caveat this with it's hard to really know because i assume there's earnings power on the come at BHE

 

what has exploded is investment income as we've moved from the zero bound on rates and cash yields something and we're in a great period of insurance underwriting, the most volatile, lowest multiple source of earnings at berkshire. like think about berkshire's investment in apple. $50B of cash becomes like $150B of cash and $60B of apple (these are swagged/incorrect), so your cash earning zero became $150B of cash making $6 billion and $60B of apple making a low divvy yield...investment income would show really high grwoth in there. 

 

i'm also kind bearish of the stock portfolio which trades at 20x forward and has done 18%/yr last 3 yrs on a wgt avg basis. like its fine, but if there were closed end fund that owned $320B of this portfolio and had a $50B DTL attached to it that prevented turnover, i'd probably want a 10-20% discount. 

 

basically on fwd looking basis, i see the private businesses as low ish growth/fairly valued. the public portfolio as fairly valued. insurance seems to be at cyclical peak (to the dilletante writing this).

 

I've been wrestling with this a fair bit in that i owned berkshire for 14 years often as biggest position, it's at roughly the average valuation of those 14 so i feel like i should like it, but i can't quite figure out if it's me who has changed (too much time slumming it in cheapo deep value nav play land...my normal stomping grounds...or if its berkshire that's genuinely changed....all i know is reinvestment risk/opportunity has never been higher given cash as % of assets. 

 

 

 

 

 

As you clearly understand, the investment thesis for Berkshire transcends current math.  Current math reflects a rather unexciting stock.  The issue is, whether and to what extent Berkshire remains status quo, i.e., stockpiling cash.  If/when it puts hundreds of billions of dollars to work, all bets are off.  

[Libs]

12 hours ago, Eldad said:

@tnathan @thepupil

 

I have operating earnings plus look through on BRK at about $30 a share. It has grown earnings over 10 years at 12.3% a year and 11.8% over 5. So you have a stock at 15.5x growing at 10 plus that is also the safest company in the world. 
 

I mean CSU and the insurance brokers are maybe a better combination of growth and value right now. CSU has major uncertainties in my mind and the insurance brokers are better on the uncertainty but are far less safe than BRK. 
 

What other names would you suggest? 
 

 

Would you mind sharing your look-through numbers?

[Parsad]

1 hour ago, petec said:

 

And neither of them can hold a candle to rugby 

 

Actually none of them can hold a candle to hockey...let's get that straight!

 

Men chasing a hardened, rubber bullet-like puck at over 30 km/hr on razor sharp skates, firing it at nearly 100 km/hr with sticks at each other, while colliding into boarded walls and open ice hits, then fighting to defend their team-mate, while playing with broken bones, ribs, missing teeth and some times even concussions!  

 

Yeah, football, rugby, no sport on earth holds a candle to that!    Cheers!

[Eldad]

8 minutes ago, Libs said:

Would you mind sharing your look-through numbers?

I can’t find the spreadsheet. Now that I think about it, I double counted the dividends. But at high $20~s the point still stands. 
 

All comes down to the growth I guess. 
 

Thank you @thepupil

[KPO]

Add to WDAY

[thepupil]

top 30 equities (vast majority) is something like $18B of 2026 earnings

 

Edited April 23 by thepupil

[Eldad]

9 minutes ago, thepupil said:

top 30 equities (vast majority) is something like $18B of 2026 earnings

 

Thanks. So that’s $8.34 a B share. So roughly $29 operating plus look through. 

[thepupil]

~$18B look through after tax

~$11B of after tax interest from $340B of cash and FI using t-bill rate of 3.6% and 10% effective tax rate

$29B from liquid portfolio

 

$14B MSR 2026E

$6B BNSF 2026E

$4.2B BHE 2026E

$24B of non insurance operating biz

 

???? Insurance underwriting. looks like sell side plugged in $5B

 

$29+$24+5 =$58B / $1,012= 5.7% earnings yield = 17.5x

 

Let's say they did a tender for $200B at current px. 

 

Cash = -200B, AT interest = -$6.5B

 

So earnings would go from $58B to $51.5B. Market cap from $1,012B to $812B assuming px unch'd. 

 

$51.5B/$812B= 6.2% earnings yield / 15.7x earnings PF for taking out 20% of shares...accretive to earnings as you're swapping out cash which trades at an after tax PE ratio of 33 for stock at my swagged 17.5. 

 

If you did it with $50B/yr (i think full payout of earnings via repo should be default at berkshire, almost regardless of price at this point, but would obviously prefer stock cheap), it would add 10 or so bps to the PF earnings yield at current valuation.

 

walking through this makes it a bit more reasonable/attractive to me. i may be missing a $1B or $3B here or there. of course look through doesn't actually represent earnings that will be reinvested/allocated by berkshire, but just trying to get a reasonable range of values here/understand better why others more excited. 

 

taking a closer look at mkt comps it becomes a bit more reasonable on a relative basis as well. I think i just don't like it as much on an absolute basis because of overall market valuations. 

 

SPX is at about 21.7x fwd

 

UNP: 21.5x

Railroads: ~22x

 

S&P 500 Utes: 19x

S&P 500 industrials: 27x ???

Building Products Index: 25x

 

PGR is 12.5x

S&P 500 Reinsurance: 7x /0.75x book

DJ Reinsurance: 7x / 0.9x book

S&P 500 Insurance: 12x / 2x book? (PGR at big multiple is largest weight, seems like some brokerages also pull up the P/B)

 

 

 

 

Edited April 23 by thepupil

[Libs]

1 hour ago, thepupil said:

top 30 equities (vast majority) is something like $18B of 2026 earnings

 

Thanks Pupil.

 

I am a simple man. $44B operating earnings + 18B look through= $62B.

 

1 trillion / 62 B = 16.1X.

 

Not cheap, not dear.

[LC]

Bought a little Nintendo, took my Berkshire short put profits and re-loaded to May 1 @ 455. 

[Eldad]

57 minutes ago, Libs said:

Thanks Pupil.

 

I am a simple man. $44B operating earnings + 18B look through= $62B.

 

1 trillion / 62 B = 16.1X.

 

Not cheap, not dear.

Pretty close to half the price of SPY. Plus lots of cash and no OpenAI receivables! 

[Saluki]

All the software stuff was down this morning after ServiceNow announced earnings, so I nibbled on the software basket for a few shares in each (Tyler, Constellation, Topicus, Lumine, DOCS, VRRM, ZETA, NTDOY).  Added a few shares to Pulsar Helium (which still looks pricey, but has pretty much gone up in a straight line for the past year except for right after I decided to buy  )

[Lazarus]

Nibbled at Nintendo.

[KPO]

6 hours ago, KPO said:

Add to WDAY

And CRM

[EgonKuhn]

Added to ACN and new starter position in BIM.PA (bioMérieux S.A.)

[Mephistopheles]

Re valuing Berkshire:

 

If you think it's cheap here, you have to assume that Abel will stop hoarding cash.

 

$1 trillion market cap with $700 bn in cash + stocks. $30 billion in pre-tax earnings excluding interest/dividends/cap gains/equity method

 

So if you net out the entire $700 bn, it's at 10x pre tax earnings, and if you net out $500 bn then it's at 16x. 

 

And there's also the optionality with the cash hoard which makes it a quasi hedge against the market. Intrinsic value would go up if S&P falls by 30% all else being equal.

 

I have options on this because of the super cheap IV, and stock not having moved in what 2 years almost. Add to this Abel likely putting the gas on the buyback machine. And with Berkshire being probably the lowest churn stock in the market, the stock price is likely to be more sensitive to repurchases.