Has Berky bottomed?

The Berkshire board is super active and everyone is posting I bought, nibbled, yada, yada…

The stock price is still above pre-covid, on variety of other indicators are telling me it could get decline further. There is no high volume flush out to establish bottom either on this individual name or on the Index.

Again valuation is a guide. Prices overshoot valuation on both sides.

On buyback, Buffett continued his buyback at steady clip, not altering much, and I expect the same now. I expect him to continue to buyback at the same steady clip of deploying all the operating income on buyback and not do any accelerated buyback.

Many folks are also expecting this sell-off means Buffett buying more stocks, I doubt that either.

I know my view is pretty contrary to the prevailing views of the board. I hope I am wrong too, as I have bought back some shares (that I sold at $350) at $300 and some more around $280. I was hoping $280 to hold, it didn’t.

My expectation now is the stock declining further and may be around $225 stabilizes finds a bottom and moves sideways for sometime, before moving up. Even if we see any bounce in the next one or two weeks, they are opportunities to take quick profit or close position with little loss and sit back and wait for the final decline.

Goodluck.

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My expectation now is the stock declining further and may be around $225 stabilizes finds a bottom and moves sideways for sometime, before moving up.

Didn’t you say just yesterday that $200 was the bottom?

https://discussion.fool.com/just-saying-35131406.aspx

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Didn’t you say just yesterday that $200 was the bottom?

No. You have the link re-read.

See kingman I do mostly agree with some of your posts, somewhat even the last paragraph which is standard jargon for all declining stocks. Interestingly to me it seems so far few seem interested in buying, more in describing how cheap the price is.

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Seems Jim led a discussion about a 100 point drop some time back which would not be at all out of the ordinary.

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“Interestingly to me it seems so far few seem interested in buying, more in describing how cheap the price is.”

Many of us already have an “irrational” amount of Berkshire :slight_smile:

I’m saving my stash in case it gets really, really cheap. And is it really cheap yet? If the equities are still a bit overpriced overall then Berkshire isn’t that cheap.

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And is it really cheap yet? If the equities are still a bit overpriced overall then Berkshire isn’t that cheap.

There is some truth to this, but not enough to change the general conclusion that it’s a good deal.
Both in absolute terms, and in terms of how infrequently such a deal usually comes up.

I apply a very substantial haircut to the richly priced equities before plugging them into my calculations of company value. I knocked off over $50bn at end Q1.
I knocked $39.5bn off the Apple position, and I believe its market value is down exactly that much right now.
And even on my conservative metric built that way, it’s quite a bit cheaper than usual at a level that corresponds to very good forward returns.

e.g., on pure price to peak book it has been cheaper than this 9.9% of the time since 2008.
On my more conservative value metric with the big haircuts to the equities, it works out to having been cheaper 11.9% of the time.
Not such a big difference.

Not using peak book makes a bigger difference.
Using ratio of price to most recently known book, it has been cheaper than this only 6.2% of the time.
But that isn’t as good a yardstick of value.

I don’t think there is anything wrong with waiting for a better deal as you are.
I too think lower prices are very likely.
But there is a risk in waiting too long for something that might not happen.
That’s why I tend to buy all the way down, starting at the point that the prospective return is at least average or better.
The lower the price, the higher the return and the lower the risk, and the bigger the position size that makes sense.
It doesn’t all have to happen one day.

Jim

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Has Berk bottomed or not certainly depends on the overall market and economic conditions.

This quarterly CEO Economic Outlook Index is an important indicator:
https://www.businessroundtable.org/media/ceo-economic-outloo…