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No. of Recommendations: 11
Operating earnings from non insurance businesses grew only 3% in favorable conditions. That’s barely above GDP. Is this what we can expect from these businesses going forward? Are they, in total, a slow to no growth business matching GDP growth? If so, only a game changing large acquisition of a growth business will move valuation higher.

Long discussion on importance of retained earnings in investment returns. Hint, no dividends are coming anytime soon and as long as Buffett is CEO.

Charlie and Warren don’t believe shares are significantly below intrinsic value. At least not enough for them to launch a significant buyback. Most estimates I have seen of intrinsic value are in the range of 1.5 - 1.6 PB. With stock currently at 1.31 PB, Charlie and Warren apparently have a lower range of intrinsic value, maybe 1.35 - 1.4.
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No. of Recommendations: 13
Disagree with the previous post completely. There's plenty of methodology offered by Buffett in last year's annual report to get your guess as to some sort of intrinsic value. Buffett/Munger's number on intrinsic value would be based on those figures and not book value. My guess is that their figure far exceeds today's stock price.

Now the growing frustrations that the cash could be put to better use...that's related, but it isn't the same thing as wild ass guessing Buffett/Munger's intrisic value.
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No. of Recommendations: 8
yes I don't think Buffett is buying shares at 3-4% below intrinsic value. When he says "modest" that is certainly open to interpretation. I say 15% at least.

He is buying albeit slowly but it seems to hover around 1.3x book.
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No. of Recommendations: 1
Operating earnings from non insurance businesses grew only 3% in favorable conditions. That’s barely above GDP.

You need to compare a non-inflation adjusted figure like that not to real GDP but to nominal GDP which for last year was about 4%, so in fact operating earnings grew less than the economy. However there's no reason to expect a collection of conservative businesses to hold their share of an innovative economy like the US, a slow and gradual loss of share should be expected and is not a bad outcome.
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No. of Recommendations: 14
However there's no reason to expect a collection of conservative businesses to hold their share of an innovative economy like the US, a slow and gradual loss of share should be expected and is not a bad outcome.

Hmm, I'm a "glass half full" kind of guy, but that seems too optimistic.

There are certainly a few firms enjoying spectacular economic results lately, but the more important point is that times
are pretty good generally and one might expect an average or allegedly better-than-average collection of businesses to be doing pretty well in this economy.
Forget the few well publicized big winners.
Berkshire's operating earnings are not keeping up with the average firm. They are bad.

On the other hand, the investments have done very well.
So overall results are good, if not exciting.

My valuation, overly simplified, breaks things down into those two categories.
Even with a big "haircut" to equities this year, each side of the firm, (cyclically adjusted) investments and (cyclically adjusted) operating earnings, is up the same 9.5%/year compounded for the last five years.
So, of course, the overall valuation estimate is up the same amount.

That's a good result, overall.
Many things do better, but Berkshire's predictability is high. Nothing else comes close in terms of "near-worst-case" return.

Jim
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No. of Recommendations: 3
Well, I stand corrected and concede my earlier statement. After reading this:

"Calculations of intrinsic value are far from precise. Consequently, neither of us feels any urgency to buy anestimated $1 of value for a very real 95 cents. In 2019, the Berkshire price/value equation was modestly favorable at times, and we spent $5 billion in repurchasing about 1% of the company."

I am somewhat surprised, Berkshire's intrinsic value is less than I have assumed.
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No. of Recommendations: 1
I think the 95 cent comment was illustrative. We shall see

I sent a question to #askwarren on it. Hopefully someone asks it and WEB addresses it directly.

I just don't seem him buying to pick up a nickel. He hates shrinking the canvass as it is.
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No. of Recommendations: 0
"canvass"

Excellent freudian comment re: WEB's motivation.
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No. of Recommendations: 0
Operating earnings from non insurance businesses grew only 3% in favorable conditions.

So this is achieved on the additional $60 B investments (i.e., over and above depreciation)?
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