Another All Time High


However, BRK is now trading with a P/B of about 1.46.
As much as I would enjoy the momentum crowd to hop on and drive it to the moon,
I realize that’s not likely.

Instead, I can imagine BRK languishing for an extended period while the book value
continues to slowly grow. No telling how long it will be before P/B become attractive.

Just wondering what changed within the markets?

Did the Market Fairies finally wave their wands in the direction of Berkshire Hathaway?

Did Elon Mush start playing bridge and decide to diversify?

1 Like

Not true at all regarding the P/B.

Currently more like 1.33X.

BRK BV has risen materially since the end of Q3.

Another quarter of retained earnings plus improvement in portfolio. If the market says AAPL & BAC prospects are improved via higher price, why not BRK as well?


Currently more like 1.33X.
BRK BV has risen materially since the end of Q3.

No doubt.
But remember that book value is just a rough-and-ready proxy for intrinsic value.
I suspect book per share rose more than IV did in Q4.



Let’s be optimistic!

you are dialed in to price to book which is great.

can you share your shorthand model?

I have a couple of numbers.

I estimate the known equity portfolio was up about $27682 per share in Q4.
That would increase book value by $21869 per share after the tax provision.
Both figures use the last known share count from October 27.
I use the known positions from the 13F, and use RSP (the S&P 500 equal weight) as a proxy for the unknown “other” positions.
This excludes KHC, as the discussion was about book. But it was almost exactly flat in the quarter anyway.
I haven’t bothered to put in BYD lately, so it has been lumped into the RSP proxy.

I estimate after-tax “steady things” operating earnings of about $3520 per share in Q4.
That includes rails, utilities, MS&R, and cyclically adjusted underwriting profit.
Q4 is usually relatively weak.

If that figure were right, the total “steady things” for 2021 would be about $14720 per share.



As interest rates rise, BRK’s float becomes more valuable. And the main driver IMO of the stock increase is the declining purchasing power of the dollar. The replacement costs of BRK’s massive productive assets (rails and utilities) is rapidly increasing. As replacement and maintenance capital expenditures increase, regulated rail and utility rates will increase which drives up the ROIC on initial capital expenditures.

That said, inflation is not good but BRK will at least maintain purchasing power and hopefully generate positive real returns.