Accurate analysis IMO on recent price/value cycles.As a long time Berkshire owner, I just wanted to add that this is not a new or recent phenomenon.I bought my first A share for $6,950. And I felt like I got ripped off because the shares were bidding $6,700. But that's not the point.This was pre Internet and there were no Intrinsic Value estimates to be found. The only BRK analysis I found calculated only the value of the stocks, bonds, and cash. They omitted the value of the Insurance Companies as well as the modest collection of non Insurance Subsidiaries ( it sure was a different mix then). Intrinsic Value then, assuming modest calculations of Operating Subs, including Insurance, was clearly north of $9,000. And the stock flatlined as IV rose to $11,0000 or so. No one recommended the stock as Buffett built the foundation of the company with huge savvy investments including Coke.Yet allegedly intelligent Investment Pros told me "you don't get richpaying $7,000 for a Single Share of Stock"..."Berkshire is like a private club, you pay thousands to get in but you know all the money was made before 1985"..."You pay that much per share to get access to Buffetts teachings, the annual report, the annual meeting..buying a share is a fee for an education so YOU can pick stocks and make money. No one ever got rich paying $7,000 for 1 share of (then) Nasdaq stock".It took years to convince investors to affix a value to the Operating Companies. Not a "reasonable value"... A "value"..any number.Berkshire stock was dormant for long periods of time, then traded like a small cap Hot IPO at other times as momentum investors piled into it with no regard to it's worth.If anything, the stock trades far more rationally today--though it seems locked into a discount to IV of between 10% and 35% or so. In the old days it still hit those discounts, but would surge well above IV for brief periods, too. Like when they issued B shares and Buffett all but said they were too expensive.Personally, I believe Buffett has drawn a line in the sand at 1.1X Book Value. And with Berkshire evolving inti a collection of Operating Companies, the PE is no longer close to meaningless(which it WAS for decades). The ratio of Look Through Earnings to Reported Earnings keeps shrinking. That makes it easier to understand. You can see objectively that you're possibly getting the Investment Portfolio-Certainly the stock portolio alone--for free.Another step in creating a virtual floor on the stock price is a Dividend issuance. WEB said he'll discuss the merits with shareholders this year. It's coming, but don't know when.Given the size of Berkshire there's probably a lower ceiling on the high end of Book trade range. My hunch is we trade a 1.2 to 1.4 times Book for several years. This will be lucrative from this entry point.
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