Price down a bit

FWIW

At the current quote, $305.30 per B, my best guess for plausible one year returns is back into double digits beyond inflation.
That will assuredly be wrong, but the notion is that it’s a 50/50 shot whether it ends up better or worse.

That implicitly assumes value growth (good) and market multiples (blah) resemble typical results since 2008.
If things are a little worse, which is a reasonable expectation, then the sensible expected return would be a little worse.
Still, “a little worse than inflation + 10.4%” is probably not that bad.

Jim

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Why buying now when I can buy it cheaper soon (probably)?

Kind of kidding - but only half:

A) I just recommended to a friend who told me in the current market he has no idea whether it will go up or down (unusual for him) that it’s not the worst of times for him to buy some Berkshire, which would be his first Berkshire shares ever, to have motivation to actively follow them.

B) But if one already is over the ears in Berkshire this is completely different. Then I stand to my “joke” above.

Why buying now when I can buy it cheaper soon (probably)?

I just nibble on the way down.
If we see something that smells like a panic/capitulation bottom, I can go in with both fists then.
Trading at around peak book value? Sign me up.

But yes…I wouldn’t argue with “probably”.

Not a hard bet. On any given day, it’s unlikely that it’s the lowest price that will ever again be seen.
And if a lower price IS seen again, it’s more likely to be soonish than many years later.
So: your cheaper soon (probably).

Jim

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I just realized that Price/BV currently is already down to 1.3, so I prepare myself to also go full in soon as according to your nice buyback chart it’s just too unlikely that it might become much cheaper.

So at $280-$290 I will buy with most of my gambling money Berkshire calls
as I have more than enough stock already (“most” as a bit of then Google for <$2000 wouldn’t be too shabby).

When will Jun/Jul’24 ones be available?
Seems in such a case you always prefer deep ITM ones?

P.S.: Me intending to go all in at $280-$290 unfortunately means it won’t go lower than $291.

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I correct myself:

  • “Unlikely that it might become much cheaper”: Yes, in normal times.
  • Buying at $280-$290: Yes, if buying shares and intending to keep them for many years.
  • But not for going “all in” with options. For that an extreme downward spike like in March 2020 (0.9x BV) would be required.
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So at $280-$290 I will buy with most of my gambling money Berkshire call
That’s not even 10% discount to current price. Separately if you are gambling something, there are many better long-term opportunities. Remember when you are gambling, you don’t swing for the safest bet, rather bet on the most upside situation, and spread the bet on few names. So even if you get correct with one or two bets the upside would be far superior.

Wow Berkshire looking pretty cheap now. I keep nibbling on the way down…

Hoping that Warren is doing my nibbling for me. Trying to think through how much lower things would need to go before doing my own nibbling.

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Hoping that Warren is doing my nibbling for me. Trying to think through how much lower things would need to go before doing my own nibbling.

Precisely. At these prices Berkshire is not a fat pitch. So one can sit tight with cash. This cycle prices could get ridiculous, who knows.