Author Topic: BRK - Berkshire Hathaway  (Read 1386 times)

Okonomen

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BRK - Berkshire Hathaway
« on: September 08, 2019, 04:34:36 AM »
Can it really be true that BRK doesn't have its own thread in here??

Many probably thinks it must be fairly valued etc, but before you dismiss it completely, let me elaborate:

* the market seems to mostly view BRK as an asset manager dependent on old Buffett’s stock picking skills, valuing the company close to 1,3x BV, thus not putting much weight on the strength of their subsidiaries

* however, BRK has 270 high quality subsidiaries generating 30 bio USD pretax earnings, among others the railway BNSF which makes up 20% of net profits. Around 70% of pretax earnings are from relatively non-cyclical businesses. Around 7 bio. USD pretax is from insurance and 5 of the 7 bio. USD is investment income generated on their float

* they have 120 bio. USD in cash ready to be deployed in a good opportunity maybe during a market crash

* they have a market portfolio worth 200 bio. USD currently. With it follows a deferred tax liability of 50 bio. USD which we can views like an interest free loan from the government

The market cap is 500 bio. USD, they have only 4 analysts and I think a fair value is closer to 700 bio. USD due to undervalued subsidiaries, but despite an upside that is not mindblowing we get also a limited downside and a great long term compounder and a uniquely advantaged structured holding company.

Any thoughts? :)

I would especially like to get some inputs on how to value their insurance operations


John Hjorth

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Re: BRK - Berkshire Hathaway
« Reply #1 on: September 08, 2019, 05:35:37 AM »
Sanjeev has been so considerate in setting up CoBF, so the talk rooms [forums, not topics] are designed separately for Berkaholics and FairFax fans, so they each have separate talk rooms [forums, not topics] so that other normal value investors aren't bothered by them when they are talking to each other and to the voices they each individually hear inside their heads. [I also hope you have noticed the nice rubber walls in there.] [ ; - ) ]
”In the race of excellence … there is no finish line.”
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Okonomen

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Re: BRK - Berkshire Hathaway
« Reply #2 on: September 08, 2019, 09:03:04 AM »
Haha well I still just see BRK currently as a potentially very sound long termvalue investment, so I just wonder why it doesn't have a thread here so that people can discuess valuation methods on BRK's intrinsic value, but I will take a look and see if I can find the other forum
« Last Edit: September 08, 2019, 09:04:47 AM by Okonomen »

SHDL

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Re: BRK - Berkshire Hathaway
« Reply #3 on: September 08, 2019, 09:16:40 AM »
There was some discussion earlier this year on this thread:

http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/2018-valuation/

I agree that BRK is quite likely to work well as a long term investment.

John Hjorth

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Re: BRK - Berkshire Hathaway
« Reply #4 on: September 08, 2019, 10:50:29 AM »
All jokes aside, Viking just posted a nice collection of some Berkshire 2018 valuation pieces in the topic mentioned by SHDL.

- - - o 0 o - - -

Also, a very belated welcome to you here on CoBF , Okonomen! [ : - ) ] [-We aren't that many Danes here on CoBF.]
”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

Okonomen

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Re: BRK - Berkshire Hathaway
« Reply #5 on: September 08, 2019, 12:21:39 PM »
Sounds interesting. Will take a look. And thanks!

wachtwoord

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Re: BRK - Berkshire Hathaway
« Reply #6 on: September 08, 2019, 01:40:31 PM »
Haha well I still just see BRK currently as a potentially very sound long termvalue investment, so I just wonder why it doesn't have a thread here so that people can discuess valuation methods on BRK's intrinsic value, but I will take a look and see if I can find the other forum

Most here agree. Therefore it has a whole subsection on this forum, not just a single thread.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"