Author Topic: Berkshire closed down to near book value  (Read 22249 times)

wescobrk

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Berkshire closed down to near book value
« on: March 12, 2020, 03:45:09 PM »
Does anyone remember during the financial crisis the lowest point relative to book value? I believe today we are only about 20 billion away or about 5% drop from here.
Forgot the former metric of 1.2x book we are almost below book.


spartansaver

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Re: Berkshire closed down to near book value
« Reply #1 on: March 12, 2020, 04:06:19 PM »
0.97x in 2009.

wabuffo

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Re: Berkshire closed down to near book value
« Reply #2 on: March 12, 2020, 04:13:29 PM »
Using the latest quarterly book value per share and the BRK-B share prices...

2011 First Greek Debt Crisis:
During Q3, 2011, BRK-B fell to 99.3% of book value per share (BRK-B lo price =$65.35).  Buffett introduced his 1.1x BV per share buyback price shortly after that.

2008-09 Great Financial Crisis:
The B's fell to 94.8% of BV per share during Q4, 2008 (BRK-B lo price = $49.02 per B-share). It's important to note that the absolute lo price for BRK-Bs was $44.82 per share during Q1, 2009.  But BV had fallen too such that the price-to-book was slightly higher than the previous Q at 95.3%.

Today:
At today's lo price at the close of $175 per share, it sits at 100.4% of book value.  Of course, book value (as during the GFC) has probably fallen - so who knows really.   But to beat the low of the GFC of 94.8%, the BRK-B shares would have to fall to $165.23.

As I look at the after-hours price, BRK-B sits at $173.50 - so the recent record is within sight, unfortunately. 

Bill
(p.s. - my quarterly records go back to 1998.  I'm sure during the 1973-74 or 1981-82 bear markets, it might have gone lower.  I believe it did during '73)
« Last Edit: March 12, 2020, 04:15:24 PM by wabuffo »

KinAlberta

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Re: Berkshire closed down to near book value
« Reply #3 on: March 12, 2020, 04:35:07 PM »
“ unfortunately ” ?

“As I look at the after-hours price, BRK-B sits at $173.50 - so the recent record is within sight, unfortunately.“

rb

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Re: Berkshire closed down to near book value
« Reply #4 on: March 12, 2020, 04:42:52 PM »
This is very interesting.

When looking at this I would suggest also considering the work that our friend Dynamic has been doing on the real time portfolio. Based on that we see that real time P/BV just breached the 1.2 threshold. It's probably around 1.15-1.17 right now. Of course that also scales with what wabuffo has posted. During those maximum low periods P/BV in real time was higher than what the last Q would indicate.

The other bit is that BRK is a much more different company today than it was in the past. Even in 2008, it didn't have BNSF, and Geico and Mid-American were much smaller so valuation should be less sensitive than BV.

I fully believe that another 10% down from here, you can just buy BRK, pour yourself a glass, and enjoy life. You don't have to worry about this stuff anymore. But then of course we won't do that.

DCG

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Re: Berkshire closed down to near book value
« Reply #5 on: March 12, 2020, 06:48:13 PM »
If it hasn't already, the market will likely soon start pricing in a BRK without Warren.

Casey

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Re: Berkshire closed down to near book value
« Reply #6 on: March 12, 2020, 06:49:45 PM »
If it hasn't already, the market will likely soon start pricing in a BRK without Warren.

Hopefully he's confining himself to taking calls from his bathtub.

Xerxes

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Re: Berkshire closed down to near book value
« Reply #7 on: March 12, 2020, 08:02:00 PM »
I added at 205, again at 195 and am glad to see I don’t need to add at 185 and go straight to 175

scorpioncapital

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Re: Berkshire closed down to near book value
« Reply #8 on: March 23, 2020, 01:54:41 AM »
It now appears to be at prices that have wiped out 10 years of gains.

meiroy

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Re: Berkshire closed down to near book value
« Reply #9 on: March 23, 2020, 02:19:57 AM »

Today:
At today's lo price at the close of $175 per share, it sits at 100.4% of book value.  Of course, book value (as during the GFC) has probably fallen - so who knows really.   But to beat the low of the GFC of 94.8%, the BRK-B shares would have to fall to $165.23.


Probably by a lot.