I see some big insider buys by Berkshire of Berkshire yesterday ($1B).
Jim, others - What’s the valuation of BRK look like relative to historical levels?
Historical Price to Book:
https://ycharts.com/companies/BRK.A/price_to_book_value
I mean, it’s down in relative terms this year, but by no means a bargain …
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Have a look over at the BRK board and you’ll find that with P/BV of around 1.35 it currently is in the middle of it’s valuation during the last 1 or 2 decades, meaning it’s as usual 5%-10% below IV, and with Jim preaching that at P/BV 1.2 it’s a screaming buy and at 1.5 one you wish to do so can lighten up.
(Sorry Jim, for putting words in your mouth should they be the wrong ones 
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Have a look over at the BRK board and you’ll find that with P/BV of around 1.35 it currently is
in the middle of it’s valuation during the last 1 or 2 decades, meaning it’s as usual 5%-10% below
IV, and with Jim preaching that at P/BV 1.2 it’s a screaming buy and at 1.5 one you wish to do so can lighten up.
(Sorry Jim, for putting words in your mouth should they be the wrong ones
Sounds pretty reasonable.
B price: $317.79
Multiple of last known book per share: 1.380
The average since the credit crunch, when multiples took a one-time permanent step downwards for some reason, has been 1.355
To today seems pretty close to typical. Not unusually cheap.
The average of my models suggests one might reasonably have a central expectation of a one year return of inflation + 7.3% from here.
That’s not so bad these days, so in that sense you could call it “underpriced, as is typical”.
(My sundry models give forecast numbers in the range inflation + 5.5% to inflation + 10.0%)
If inflation is 4% (who knows?) that would give a price target of $532055 per share = $354.70 per B share.
That target will be wrong. The idea is that it’s a 50/50 shot whether it’s too high or too low.
I lightened up on the recent high prices in March, and I’m waiting for a dip to pile in again.
This is probably not a great strategy, but it’s how I roll : )
I plan to use my bottom detector to help pick the re entry, as Berkshire’s short term price movement correlates strongly with the S&P these days.
Jim
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