Author Topic: berkshire - cheap?  (Read 55153 times)

MarioP

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Re: berkshire - cheap?
« Reply #300 on: September 22, 2018, 01:00:14 PM »
With regard to how to value the Berkshire insurance float, - popping up again here now -, I still think the best place I have read about it is rb's post #89 in this topic of July 19th 2017. rb's angle & way of looking at it just makes so much sense to me.

Thank you for remembering that John. What I found interesting is that since the formula was posted

D=F*c*(1-t)/r where

D=Discount to float face value
F=Float face value
c=coupon BRK would have to pay on debt
t=BRK tax rate
r= hurdle rate

F is higher; t is lower and c is higher

So the discounted float is gaining value faster than the float face



John Hjorth

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Re: berkshire - cheap?
« Reply #301 on: September 22, 2018, 02:03:20 PM »
Thank you, Mario,

Actually, I didn't just "remember" here. rb's post is actually like some kind of script chiseled into my mind, as a - by basis - logic and quite simple solution to a question that I at that time had been struggling with for years. Simplifying it, yes, but still giving it some structure, that my brain can relate to. Up to us as readers of the post - based on our own expectations, to create the probability range.

It's like being hit over the head by a cub.

CoBF is actually stuffed up with beautiful things like this.  One just has to recognize it when one read it. It's all searchable - you just have to remember the bright person. By doing so, we all get less dumb.

Still H/T rb here.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

AdjustedEarnings

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Re: berkshire - cheap?
« Reply #302 on: October 17, 2018, 09:07:37 AM »
Sell-side analysts (and 'Mr. Market'?) at work... if you are GOOG, you can get credit for undistributed cash in your valuation and your unproven 'moonshots'. But, if you are BRK, you get no credit for undistributed cash (thankfully, now being put towards the buyback) and only partial credit for your investments.

https://www.cnbc.com/2018/10/17/jp-morgan-berkshire-hathaway-shares-look-really-cheap-using-buffett-method.html