Using the WEB 2018 method:
(BNSF + BHE + MSR earnings) * 15
Equities - Cost basis * 0.21 (21% tax)
Cash + Bonds - $30B
Equity method earnings * 15
IV $340/B
1.5 x last known book value.
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The $30b holdback on the cash is a fantasy. I have no idea why he restates that.
more like $70B to $100B
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I am going with $60-70B permanent cash and IV $550-580K. I like Bloomstran’s methodology of the different ways from A-Z, but it seemed maybe a bit high. If WEB sees pretty good value…
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Equities - Cost basis * 0.21 (21% tax)
Wouldn’t the realizable equity value be “Equities - (Equities - Cost basis) * 0.21” ? Am I missing something?
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“ Wouldn’t the realizable equity value be “Equities - (Equities - Cost basis) * 0.21” ? Am I missing something?”
You, sir, are correct.
Wouldn’t the realizable equity value be “Equities - (Equities - Cost basis) * 0.21” ? Am I missing something?
It would, I just wrote it out wrong. Thanks for noticing.
Calculation was correct.
The $30b holdback on the cash is a fantasy. I have no idea why he restates that.
more like $70B to $100B
Yes, I go back and forth on that.
I think he means they’d never, ever go below $30B. They might go close to that temporarily for a great acquisition. It wouldn’t be for long, though. Something else would soon be sold to get liquidity back up. Having all that cash has optionality value.
Various 5 groves:
15x, exclude $30B cash => $340
15x, exclude $70B cash => $322
15x, exclude $70B cash, assume cap gains never paid => $345
17x, exclude $30B cash => $358
17x, exclude $70B cash => $341
17x, exclude $70B cash, assume cap gains never paid => $364
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