I can't argue with buying more shares at the current valuation but the reason behind the buying seems suspect to me for the reasons outlined earlier. Notably, it appears to have nothing to do with intrinsic value since Berkshire's IV is only modestly higher today than it was yesterday (due to the effect of the repurchase). His buy decision appears to be based on the perception of the increased floor alone. This may sound a bit nutty but... I think Berkshire's IV has actually increased due to the higher P/B limit, in the same way that a puttable bond commands a higher price (lower yield) the higher the put value; and always higher than an otherwise identical non-puttable bond.Of course, unlike a bond, BRK is not obligated to do buybacks if the P/B goes below 1.2 (as Jim and others have stated), but the general market sentiment seems to be that it is a guarantee of some sort.
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