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Post by Fearchar on Jun 10, 2022 14:42:52 GMT
At the current quote, $293.25 per B, best guess one year returns is low double digits beyond inflation. That will assuredly be wrong, but I am assuming only reasonable growth with so so market multiples.
If things are a little worse, which is entirely possible, then returns could be a little worse. Still, "a little worse than inflation + 10%" is probably not that bad.
Notice; BRK valuation have been cheaper than this about half of the time since the start of 2008. So...basically current pricing is near average for the modern era.
Of course, average market valuation corresponds to somewhat undervalued in real terms. Naturally, it's cheaper than average half the time, so such opportunities aren't rare. Price has been lower than 1.3 times peak-to-date book-per-share 29% of the time since the big drop in average valuation multiples in 2008.
Of course, I don't know what will be typical of the future, but price fluctuation are far from dead. So fine returns might be a reasonable expectation. Just not exceptionally strong ones.
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Post by richardsok on Jun 10, 2022 15:16:46 GMT
Fearless -- After it dropped about 10% from its highs, I added BRK-B to my watchlist a couple of weeks ago where it still remains. Haven't come close to buying a share, tho. Technicals are super ugly as fall from top now at 20%.
I didn't need BRK-B this spring as I already had plenty of other places to lose money.
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Post by Fearchar on Jan 28, 2023 11:02:23 GMT
Quick Update:
Most recent 36 month correlation between BRK and the S&P (VOO) is 0.75 P/Book is 1.5 (not a buy)
BRK is my largest holding
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Post by Fearchar on Mar 24, 2023 17:04:25 GMT
Update:
BRK has been selling just below a Price/Book ratio of 1.40. This is the approximate level below which BRK is a good buy.
I already own a lot as a long term holding. If price continues to drop, I will begin buying more!
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Post by Fearchar on May 7, 2023 12:04:59 GMT
Berkshire Hathaway annual shareholder meeting was held this weekend. Morningstar's long time BRK analyst Greggory Warren CFA (no relation) provides an update. "We value the Class A shares at $555,000 and the Class B shares at $370. This is equivalent to 1.45 and 1.33 times our estimates for Berkshire’s book value per share at the end of 2023 and 2024, respectively. For some perspective, the shares have traded at an average of 1.41 times trailing calendar quarter-end book value per share during the past five years and 1.44 times during the past 10 years. We use a 9.0% cost of equity in our valuation and assume that Berkshire pays a minimum of 15% corporate alternative minimum tax on adjusted financial statement income for taxable years beginning in 2023." www.morningstar.com/articles/1153343/is-berkshire-hathaway-stock-a-buy-today"Bulls Say * Book value per share, which is a good proxy for measuring changes in Berkshire’s intrinsic value, increased at an estimated 18.3% compound annual growth rate during 1965-2022, compared with a 9.9% return for the S&P 500 TR Index. * Berkshire’s stock performance has generally been solid, increasing at a 9.5% CAGR during 2018-22 and 13.3% during 2013-22, compared with 9.4% and 12.6% respective average annual returns for the S&P 500 TR Index. * At the end of 2022, Berkshire had approximately $164 billion in insurance float. The cost of its float has been negative for much of the past two decades. Bears Say * Given its size, Berkshire’s biggest long-term hurdle will be its ability to consistently find deals that not only add value but are large enough to be meaningful. * Another big issue facing the company is the longevity of chair and CEO Warren Buffett (who turns 93 at the end of August) and managing partner Charlie Munger (who turned 99 in January). * Berkshire’s insurance business faces competitive and highly cyclical markets that occasionally produce large losses, and several of its noninsurance operations are economically sensitive and focused on U.S. markets."
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Post by yogibearbull on May 7, 2023 12:14:01 GMT
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Post by Fearchar on May 7, 2023 12:43:39 GMT
Thanks Yogi;
"What gives you opportunities is other people doing dumb things," Buffett said. "During the 58 years we've been running Berkshire, I would say there's been a great increase in the number of people doing dumb things — and they do big dumb things. And the reason they do it, to some extent, is because they can get money from other people so much easier than when we started."
"Munger, for his part, was less sanguine on the future of the value investor's pursuit to buy great companies at fair prices.
"I think value investors are going to have a harder time now that there’s so many of them competing for a diminished bunch of opportunities," Munger said. "So my advice to value investors is to get used to making less."
To which Buffett quipped: "Charlie has been telling me the same thing the whole time."
"There is so much money now in the hands of so many smart people all trying to outsmart one another," Munger said. "It’s a radically different world from the world we started in."
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