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No. of Recommendations: 38
Despite the ugly headlines regarding Q3, I didn't find it so bad. The two-column approach suggested that intrinsic value remained roughly unchanged (and this is ignoring the fact that some good investments appear to have been made: GS, GE, CEG).

2 Column Approach

First column:
Value of investments per "A" share is $86,218 (excludes finance and utility which are part of the second column; numbers from 10-Q)

Second column:
Earnings: Operating businesses less net-investment income (9 months, pre-tax; p12 of 10-Q) = $6,473 mil (I added $233 million for missing Marmon in the early part of the year)
Annualized = 4/3 * $6,473 mil = $8,631 mil

Per ‘A’ share = $8,631 / 1.548 = $5,573

At a pre-tax P/E of 10 = 10 * $5,573 = $55,730

Totaling:
TOTAL = $86,218 + $55,730 = $141,948
(The abouve compares to my Q2 ending estimate of $142,701.)


[Note 1: Minority interests seem to have about a 5% claim on the earnings, so there should be some reduction.
Note 2: Underwriting earnings, which are part of the operating earnings, will probably be higher than taking 4/3 times the first nine month's earnings. That's because there was a hurricane in Q3 that will not occur in Q4.]

If Berkshire's equity portfolio falls by 10%, then the above valuation is reduced by about $5,000 per share.

As I write this, the stock is at $106,720.

RR
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