Adding BRK/ Macro

Bought another chunk of B shares @$268 on the reaction to the job data, and I highly suspect sizable repurchases this quarter. P/highest book 1.2 range and imo it “feels” like a lot of money is on the sidelines to dive into risk assets when the Fed has even slightly less hawkish language and lower rate hikes, especially with algos. Suspect BRK (and markets) will rise significantly in market price relatively quickly when that moment finally comes. In the meantime, try to keep adding at a similar price to June despite $7B+ growth in earnings since that time. Agree? Disagree?

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Agree. To borrow the wording of the B Of A analyst who recently said about the S&P, “Nibble at 3600; bite at 3300, and gorge at 3000,” I’d say of BRK, “Nibble at 1.3x current BV; bite at 1.2x current BV and gorge at 1.1x current BV.” I estimate IV to be about 1.5x BV, and I guesstimate current BV to be about $320K/A-share. Berkies like us enjoy modeling and forecasting (I certainly do), but in the end it’s usually pretty much that simple.

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