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There has arguably been a Buffett premium at times since 2000 but it is not clear that periods of overvaluation were specific to Buffett at all. Most stocks have periods of over and undervaluation including Berkshire. It isn't useful to spend too much time psychoanalyzing Mr Market.
Berkshire Hathaway is the company it is because of Mr. Buffet.
Ignoring that fact when valuing the company just because it's difficult to factor in means you get a result that is precisely wrong.

We won't be able to agree about this Buffett premium business if we don't make the distinction between value and price.

Most of us would agree that the ongoing presence of Mr Buffett adds value to Berkshire, since he is a great allocator of capital, motivator of CEOs, and obtains opportunities that others would never get. Still on the value side, Buffett also has some negative features - his refusal to buy back his own shares, his refusal to hedge, his perhaps somewhat excessive prudence, his reluctance to abandon failing businesses (Netjets?) and his attraction to stodgy things like shoemakers and newspapers.

Then there's the price side: how much of Berkshire's share price does Mr Market assign based on Mr Buffett's presence? We may find this out, if he disappears suddenly, and I suspect that we would find out that there is not much of a price premium, maybe because Mr Market is just as aware of the negative features mentioned above, or maybe because he is in a temporary rational phase where he attributes only a small value to the future contributions of an 82 year old.

But price is not value. In the above 2 quotes, rationalwalk is talking about market (price) premium, saying there doesn't seem to be one at the moment, since the charge of a meal at the Berkshire smorgasborg seems to correspond closely to the price of each of the foods on offer; and advocatus is talking about value premium, saying there has to be one, since any buffet is what it is because of who made the food.

Regards, DTM
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