Poll: How low Berkshire will go in this market?

How low you think Berkshire will hit in the current down cycle?

  • $280
  • $250
  • $200
  • Lower than $200

0 voters

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In previous drops “if” the S&P takes a 50% haircut Berkshire does too (eventually) the low point is often 0.9 / 1 x book. $207 and $228. Will history repeat. Who knows :person_shrugging:???

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In a really bad market, BRK could drop 1/3 to 1/2 from its peak.
I don’t expect this to be like 2008-2009, though.
1/3 would be around $240 per b share, but I think that is not likely.
Of the options given, I’ll take $280, I guess.

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In previous drops “if” the S&P takes a 50% haircut Berkshire does too

If you look at SP400 (midcap) or sp600 (small cap) they are all down significantly, for ex: in Russell 3000 over 1480 out of 2700 companies (yeah only 2700 in the index) are down more than 40%. About 500 companies are down 80%.

So the SP500 Index is not showing the level carnage because it is pretty much held up by handful of mega caps. Is Berkshire similar to mega cap? From market cap point of view yeah, but their operating businesses are a collection of small cap companies, with couple of large cap’s and an equity portfolio.

I think Berkshire performance aligns with SPY is a coincidence, and not sure how much it is truly correlated.

The fact this poll is being posted is a tell that today’s prices are a screaming buy. WEB paid $322/b share.

NOBODY on the board is pounding the table on a single stock. Just “accumulating” talk.

Most are big talkers and able to readily quote Buffett but when times get tough, they all disappear.

LIKE NOW.

In the past two years, demands for home working equipment and software have boomed. Now the tide has turned, expect revenues from high tech businesses to drop significantly.

https://www.yahoo.com/finance/news/chinas-top-chipmaker-smic…

Pounding the table? On what?
Times getting tough? For what?

“Screaming” buys? Where? If BRK were 10%+ lower, then…

WEB paid $322/b share
Mhm, I should write him that as his partner I am concerned about him becoming too generous.

Said 61%BRK/28%Cash

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“The fact this poll is being posted is a tell that today’s prices are a screaming buy. WEB paid $322/b share.”

I see it as a solid buy (and have been adding on the downturn) but not a screaming buy. Seems like it is maybe 20% or so off IV. WEB sees opportunities, has been Quite active & just spent $40B over a few weeks, combined with ongoing demonstrated meaningful buybacks. The world is fearful and full of the doom and gloom talking heads but Warren keeps being the GOAT. No doubt he keeps daily vital signs on hundreds of businesses from his front line generals. He and CMT must love the opportunities that all of this volatility, fear and uncertainty create. He will really load up on buybacks if it drops to sub-280 imo, as he should. Interesting times. Very pleased WEB has once again brilliantly and quietly silenced a lot of the critics over the last few years.

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NOBODY on the board is pounding the table on a single stock. Just “accumulating” talk.
Most are big talkers and able to readily quote Buffett but when times get tough, they all disappear.

Have you considered the notion that this calm result is not because such people are fearful,
but because the quality securities they watch are not [yet] seen to be compellingly priced?

The stuff that has fallen the most lately has mostly just been taking out the trash.
Recall that Berkshire is up year to date.

Jim

38 Likes

NOBODY on the board is pounding the table on a single stock.

I am not sure I have mentioned it in this board, but I have recently posted on a couple of threads on Other boards.

Asset Managers are very cheap. BlackRock the biggest gorilla of them is 20-30% below fair value. TROW is even cheaper, but it has issues recently with declining AUM in its funds. You could also consider Brookfield Asset Management and Legal & General.

But if I had to pick just one it would be BLK, the safest of the lot, because of its size and diversity of assets, both passive and active.

The excitement over Berkshire is interesting. While my posts about the businesses of energy and oil/gas were a tad angled towards making “conversation”— I do think Berkshire is conservatively priced. But as far as some big plummet in the stock, it simply hasn’t even hardly moved at all if you have any sort of historical mindset.

I’d be happy to have all my money in Berkshire at today’s price. Or I’d be quite happy to have all cash.

Along the way firms like Wells Fargo cover my largest holding, AJ Gallagher. Wells does exaxctly the same thing with AJ Gallagher as they do with the railroads. They post analyst reports that are very positive all the way up, the stock price of NSC, CSX, UNP and the insurance broker AJ Gallagher are basically never high enough. That is until something happens, the the stock prices are meaningless because Wells will stomp covering those securities.

How many times has Wells done this? Two full cycles before and my guess we are in the first half of the third cycle. Wells does the same thing with the back I was a founding shareholder of called East West. They bail out of coverage once things have cyclically peaked.

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They bail out of coverage once things have cyclically peaked.

Many sell side does that. Story has changed and it is difficult to defend past price targets. So they cut coverage, or analyst leaves the firm and goes elsewhere. They do a reset with initiating coverage!!

But, when an entire industry is taken out of coverage often that is an indication some industry wide thesis has changed.

Have you considered the notion that this calm result is not because such people are fearful,
but because the quality securities they watch are not [yet] seen to be compellingly priced?

The stuff that has fallen the most lately has mostly just been taking out the trash.
Recall that Berkshire is up year to date.

Jim

NOT ONE IDEA IN THE CARNAGE? MEGA CAP TECH LIKE GOOGL IS -20%

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The stuff that has fallen the most lately has mostly just been taking out the trash.

A stock price goes up and down doesn’t make a business a trash. It is just valuation is out of whack in both direction. Those who have extremely short-sighted views spew such non-sense.

It is funny people think they don’t have to do any work, simply take a GAAP profit as GOSPEL and apply 15x and are entitled to steady state 10% return, are basically lazy and at times with limited toolset.

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NOT ONE IDEA IN THE CARNAGE? MEGA CAP TECH LIKE GOOGL IS -20%

It ain’t where you been, but where you at.

I think returns from Google will probably be very nice from here.
But it’s not shockingly cheap, just a little cheaper than its own deservedly bullish average.
Still about 5.6 times sales, hardly a 1982 harem situation when 5.6 times earnings was typical.
Good enough to buy some…I did recently… but “table pounding” to me presupposes an unusually good deal unlikely to last or be soon repeated.

Jim

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That is just an overly followed and analyzed mega-cap.

Want table pounder?

Liberty Latin America (LILAK)…stock $8-9/share. Co will have $1.50 share in free cash flow next year and growing

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The 20+% revenue growth of high tech such as google over the past decades is not normal, it reflects to-online movement of business and personal activities. At some point it will saturate and come down to normal economic growth.

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The 20+% revenue growth of high tech such as google over the past decades is not normal

There is going to be a wave of M&A’s that is going to allow many companies to continue to grow topline.

There is going to be a wave of M&A’s that is going to allow many companies to continue to grow topline.

That might be possible for some of the smaller companies, but I doubt the biggest ones will be allowed to by the regulators. No more FB buying Instagram or GOOG buying YouTube. Even if US regulators show leniency, EU certainly won’t. They greatly regret the dominance of large US tech companies which have left EU lagging in important digital sectors.

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I doubt the biggest ones will be allowed to by the regulators.

It is a fair concern, especially given the track record of FTC Chair Lina Khan. Also, for the big tech companies M&A is hardly going to move the needle, rather it gives exposure to technology. Separately, I am impressed by Lina Khan. Such a bright talent at a young age.

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