1.95x future book value?

This silly article says it’s not time to buy Berkshire Hathaway: https://www.thestreet.com/.amp/investing/berkshire-hathaway-…

But it quotes some guy as saying:
“BRK.B’s March 29 new high came in at an absurd 1.95-times projected year-end 2022 book value.”

I’ve never seen Berkshire projected end-of-year book values, have you guys? And why would they be so low as to make March’s high almost 2x book value?

I did notice Buffett said no to buying Allegheny with stock- a sign that he did not believe early March Berkshire prices to be above intrinsic value.

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“I did notice Buffett said no to buying Allegheny with stock”

I would be shocked to see him use Berkshire stock as currency in any deals in his lifetime at these values. I recall him saying that he would rather have a colonoscopy then use Berkshire as a currency nowadays. P/B is 1.55 or so and I think it was 3.0 when he brilliantly used it to acquire Gen Re. Classic WEB although he acts as though that it was a mistake to do so!

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I would be shocked to see him use Berkshire stock as currency in any deals in his lifetime at these values

While I understand his stand, sometimes I also wonder whether WEB is suffering from “cat on a hot stove” syndrome. I understand he now recognize using Berkshire shares for Dexter shoe deal is a mistake.
However, Why companies go public? The primary reason is they can issue equity to raise cash. When you are not using your stocks as “currency”, and neither buying back and accumulating over $100 B, that is a head scratcher.

This board participants may be very partial to WEB, but future historians will point out as a major, serious failure of someone hailed as “capital allocation” genius.

I would be shocked to see him use Berkshire stock as currency in any deals in his lifetime at these values. I recall him saying that he would rather have a colonoscopy then use Berkshire as a currency nowadays.

First of all, you say colonoscopy as though it were something bad…

But if this really is Buffet’s view, I wonder how he would explain the difference between paying $10b in cash for an acquisition and in the same year buying back $15b worth of shares, versus paying $10b in shares for an acquisition, and upping share repurchases to $25b.

Both paths lead to the same result: $25b less cash, in exchange for a $10b acquisition and $15b less shares outstanding.

Now that Buffett has gotten buyback religion, Munger should encourage him to destroy another long-cherished belief that no longer makes any sense.

dtb

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But if this really is Buffet’s view, I wonder how he would explain the difference between paying $10b in cash for an acquisition and in the same year buying back $15b worth of shares, versus paying $10b in shares for an acquisition, and upping share repurchases to $25b.

I think he did:

“It should be noted that Berkshire’s buyback opportunities are limited because of its high-class investor base. If our shares were heavily held by short-term speculators, both price volatility and transaction volumes would materially increase. That kind of reshaping would offer us far greater opportunities for creating value by making repurchases. Nevertheless, Charlie and I far prefer the owners we have, even though their admirable buy-and-keep attitudes limit the extent to which long-term shareholders can profit from opportunistic repurchases.”

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But it quotes some guy as saying:
“BRK.B’s March 29 new high came in at an absurd 1.95-times projected year-end 2022 book value.”
I’ve never seen Berkshire projected end-of-year book values, have you guys?

The explanation is obvious: he’s anticipating a huge drop in book per share.
Combined with a flat market price, you could see P/B soar, right?

: )
Jim

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