I guess Berkshire roughly follows the S&P 500 in big bear markets.
To get an idea of the size of the current downturn vs. 2002 and 2009 I looked at a log chart of SPY: https://imgur.com/a/wbpqJEC
Doesn’t look like SPY has fallen much yet on there. Eyeballing that I can see SPY and BRK falling another 40%, so that gets us back to $200.
SA
John Malone buying:
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001712184/fdd2a60…
Here are my 2 cents
. Lots of air has been let out of the bubble but it has been largely in the speculative areas
. Most of the great companies are still very expensive
. Particularly when you consider the standard culture of treating shareholders/strangers badly (excessive pay, back handed stock options, aggressive accounting, adjusted EBITDA BS, projections of wondrous future earnings, cancerous bureaucracy, short term thinking)
. For me to buy more of the few great companies I already own a little of, I need prices to be a lot lower to compensate for the risks of partnering with most managers who are incentivised to serve themselves
. Berkshire is a rare exception. Would be happy to buy more at these levels if I was not already 90%
. Alphabet at 12 or 15 TTM earnings would be in the sweet spot. Long way from there. Few companies are worth 20x. I have noticed Buffett doesn’t often pay much more than 10x
. Crystal ball says rates go higher but not much. Inflation moderates as wealth is destroyed and economic growth stalls. Eventually the fed steps back in to inflate the bubbles and save the economy. We are living in difficult times. Lots of volatility in stocks ahead. They can go up a lot and they can go down a lot. I’m not buying more unless they get really cheap. That may or may not happen
. Great to see Buffett putting cash to work although nothing too exciting so far. Seems more like a hedge against inflation or exploiting an oil supply issue. Hopefully he gets to bag another big home run type whale that Berkshire can ride for 30 years
EV…I’ll challenge you (politely) that the oil/gas investments are anything but wild-and-crazy homeruns. I think these investments are going to blow the doors off in the next few years.
My highly “expert” opinion was really just saying that maybe the oil buys are things Berkshire might do well on over 2 or 3 years but could be sold when the lads think the supply demand thing has changed sufficiently. And that I’m hoping they buy a Munger style buy and hold great company that Berkshire holds for 30 years. I don’t think this is the oil stocks.
I own a little OXY coat tails and am interested in what you and other folks think of its prospects and Buffett’s angle?
EV I’m just guessing the “bird in hand” better than “bird in bush” thing is raging within our man Buffett presently. Also guessing like Richard Bernstein (his Twitter feed) has been correct now for some time, that energy is the growth trade going forward for literally years.
Alphabet at 12 or 15 TTM earnings would be in the sweet spot.
Hard to think of it getting that low; unless their business forecast changes dramatically. With massive buy backs and strong growth in both revenue and margins it would seem absurd to see that at 15x let alone 12x. If they got that low the rest of the market would probably be at 8x which hasn’t happened since 1982 - when interest rates where above 15%
tecmo
…
It was 16+ PE during the tech falloff in late 2011 and again in mid-2012. But not since!
Currently trading exactly on 5 year average trend @ 1.365 x book and $307