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No. of Recommendations: 6

If the last know buyback was a 95 cent dollar

I'm not sure where people are getting this 95 cent dollar implication from.

I don't think Buffett is saying that the current price represents 95 cent vs intrinsic value at all.

I took the line in the letter to point out the fact that intrinsic value is imprecise and that requires a reasonable margin to the calculation to be sure you are under it. He has pointed this out many times before as well so this is hardly new.

If you look at some information on the 10-K you get a pretty good idea that the current price is comfortably below their calculation of intrinsic value ( and other analysts arriving at these independently ranging from $253-$300 per B)

- He paid up to $222 per B till Dec 31
- Modest buybacks continued between Jan 1 and Feb 13 where the price was close to today's.
- He is inviting people to call with offers to sell $20m+ blocks. For this to make any sense and have a chance of being taken up, a prospective seller would require at least a 5% premium to the current market price which they can access with ease for a liquid share like Berkshire.

Having said that. I think Buffett continues to make things unnecessarily complicated for himself on buybacks with these rules that he needs to keep explaining all the time. The problem is that some of his execution then becomes hard to understand. For example, according to the 10-K in 2019, they increased the buybacks after the price increased by 10% but barely did anything when the price was languishing. In fact in the last 2 years, the volume of buybacks has been the lowest when the price was the most attractive ( Q4 2018) and highest when the price was the highest ( Q4 2019).
It would be a lot easier if they moved to a simple buyback program and really tucked in when prices are low and they have more than ample cash which does not have a clear current use in reinvestment ir acquisition opportunities.
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