Author Topic: Buffett/Berkshire - general news  (Read 491690 times)

petec

  • Hero Member
  • *****
  • Posts: 1839
Re: Buffett/Berkshire - general news
« Reply #60 on: December 01, 2014, 07:05:10 AM »
Anybody selling BRK? Looks to have hit 1.5xBV, which seems to be many people's estimate of FV...

Certainly isn't mine ;)

I think it's on a mid-teens look-through PE which given the quality of the businesses and the capital allocation is absolutely fine by me.


redskin

  • Full Member
  • ***
  • Posts: 198
Re: Buffett/Berkshire - general news
« Reply #61 on: December 01, 2014, 08:49:24 AM »
Buffett stated in last years annual report that, 'When our current projects are completed, MidAmerican’s renewables portfolio will have cost $15 billion.'  If you look at the Q3 filing of BH Energy, the renewables segment had operating income of only $252 million for the 9 months year to date.  A 10% return on the $15 billion portfolio should produce $1.5B pre tax.  There is going to be a big jump in earnings as these projects come online in the next few years and new projects are added. 

During the annual meeting a couple years ago Buffett mentioned he could see an additional $100 billion invested in utilites over the next 10 years.

Palantir

  • Hero Member
  • *****
  • Posts: 2620
Re: Buffett/Berkshire - general news
« Reply #62 on: December 01, 2014, 11:46:55 AM »
Anybody selling BRK? Looks to have hit 1.5xBV, which seems to be many people's estimate of FV...

Certainly isn't mine ;)

I think it's on a mid-teens look-through PE which given the quality of the businesses and the capital allocation is absolutely fine by me.

So what is your estimate of FV?
My Portfolio: AMZN, PAGP, FSLR, OKE, PYPL, RHT, MSFT

petec

  • Hero Member
  • *****
  • Posts: 1839
Re: Buffett/Berkshire - general news
« Reply #63 on: December 03, 2014, 07:59:42 AM »
Anybody selling BRK? Looks to have hit 1.5xBV, which seems to be many people's estimate of FV...

Certainly isn't mine ;)

I think it's on a mid-teens look-through PE which given the quality of the businesses and the capital allocation is absolutely fine by me.

So what is your estimate of FV?

To be completely blunt, I don't make one.   My main point (poorly expressed perhaps) was more that I find it easy to believe that a company like Berkshire might be worth a substantial premium to BV.   My subsidiary point is that 15x 2014 doesn't strike me as expensive when you look at the quality of the underlying businesses, the multiples that peers trade on (railcos for example), and the quality of the capital allocation which should have a huge impact on multiples.

Now clearly if I don't have a specific FV estimate I don't know where I'd sell.   That's true.   As long as I don't think it looks overvalued on a basic metric such as lookthrough PE, I won't think much more about it.   If it gets to the point where the basic metrics make me twitchy, I'll have a more serious dig into how fast IV might grow.   E.g., I might start thinking seriously at 2x bv, or 20x 1y fwd lookthrough earnings.   A big part of my investment philosophy is to ask if I'd like to own this operating business forever, get in at the right price, and then apply "lethargy bordering on sloth", as WB would put it.

P

longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1785
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #64 on: December 03, 2014, 09:15:14 AM »
Anybody selling BRK? Looks to have hit 1.5xBV, which seems to be many people's estimate of FV...

Certainly isn't mine ;)

I think it's on a mid-teens look-through PE which given the quality of the businesses and the capital allocation is absolutely fine by me.

So what is your estimate of FV?

To be completely blunt, I don't make one.   My main point (poorly expressed perhaps) was more that I find it easy to believe that a company like Berkshire might be worth a substantial premium to BV.   My subsidiary point is that 15x 2014 doesn't strike me as expensive when you look at the quality of the underlying businesses, the multiples that peers trade on (railcos for example), and the quality of the capital allocation which should have a huge impact on multiples.

Now clearly if I don't have a specific FV estimate I don't know where I'd sell.   That's true.   As long as I don't think it looks overvalued on a basic metric such as lookthrough PE, I won't think much more about it.   If it gets to the point where the basic metrics make me twitchy, I'll have a more serious dig into how fast IV might grow.   E.g., I might start thinking seriously at 2x bv, or 20x 1y fwd lookthrough earnings.   A big part of my investment philosophy is to ask if I'd like to own this operating business forever, get in at the right price, and then apply "lethargy bordering on sloth", as WB would put it.

P
+1
BRK was selling for BV and below BV 3-5 years ago. Bought then, it was the ultimate value buy in a lifetime. My BRK is not for sale until the money is needed.

Charlie

  • Sr. Member
  • ****
  • Posts: 291
Re: Buffett/Berkshire - general news
« Reply #65 on: December 05, 2014, 06:54:19 AM »
"BRK was selling for BV and below BV 3-5 years ago. Bought then, it was the ultimate value buy in a lifetime."

+1
At the time I had 50% in Berkshire and bought more just before the repurchase announcement.
Since then I enjoyed the ride.  ;)
At the moment I´m invested 99% in Berkshire and 1% in IBM.
Regarding selling I am constantly reminded of Munger who said to his relatives at the Berkshire Meeting:
"Don´t be so dumb to sell your Berkshire shares."
and Buffett said: "That goes for the Buffett family as well."

 :)


fareastwarriors

  • Hero Member
  • *****
  • Posts: 3539
Re: Buffett/Berkshire - general news
« Reply #66 on: March 10, 2015, 10:44:48 PM »

longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1785
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #67 on: March 11, 2015, 09:38:40 AM »
Buffett Says ‘Fun Has Just Started’ for Auto Sales at Berkshire


http://www.bloomberg.com/news/articles/2015-03-10/buffett-says-fun-has-just-started-for-auto-sales-at-berkshire

http://www.berkshirehathawayautomotive.com/index.htm is the newly minted website. They also bought a Fort Worth dealership in the first week.

Jurgis

  • Hero Member
  • *****
  • Posts: 4596
    • Porfolio
Re: Buffett/Berkshire - general news
« Reply #68 on: March 11, 2015, 11:05:06 AM »
Buffett Says ‘Fun Has Just Started’ for Auto Sales at Berkshire


http://www.bloomberg.com/news/articles/2015-03-10/buffett-says-fun-has-just-started-for-auto-sales-at-berkshire

Is it going to be the same "screw the customer" experience as in other auto dealerships?
"Before you can be rich, you must be poor." - Nef Anyo
--------------------------------------------------------------------
"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

oddballstocks

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 2246
    • Oddball Stocks Blog
Re: Buffett/Berkshire - general news
« Reply #69 on: March 11, 2015, 11:42:23 AM »
Buffett Says ‘Fun Has Just Started’ for Auto Sales at Berkshire


http://www.bloomberg.com/news/articles/2015-03-10/buffett-says-fun-has-just-started-for-auto-sales-at-berkshire

Is it going to be the same "screw the customer" experience as in other auto dealerships?

I guess I don't understand this purchase.  I have a friend who is in car dealerships and he's been saying valuations have been stretched for years.  When he and others are thinking of getting out you have Buffett climbing in.  The industry has completely changed in the last few years.

Previously there was a greater margin on new cars.  Now that margin has shrunk and dealers make their money on incentives from the manufacturers.  They also make money on service.

Used car sales offer some promise.  There is a LOT of margin in most sales especially in the $5-15k range.

Incentives have changed with online sales.  We recently purchased a car from a volume dealer near us.  The price changed on a fairly regular basis based on the surrounding market.  The dealer didn't actually set the price, they set parameters in the software and let the software set the price.  We paid what I'd consider a fair price.  The car is in great shape and is somewhat rare.  It was cheaper than other cars in the area by a few percentage points.  The dealer said the slight discount is how he moves volume.  They do 150-200 cars a month and have found for them that's the only way to make money.  It's an interesting business model.  I ran this by my friend who's in the dealer business, he knew the software immediately and said it's what everyone has moved to.  There isn't a guy out there guestimating a value anymore.

Part of me thinks Buffett is out of touch on this.  He's thinking dealerships are still full of guys in corduroy blazers with elbow patches working customers over for every last cent.  With the Internet and mobile I don't think too many customers have patience for that business model anymore.  Especially if you can go on TrueCar or a million other sites while at the dealer and see what others have paid.
The ultimate edge for bank investors: http://www.completebankdata.com