Author Topic: BRK Valuation  (Read 26678 times)

ValueMaven

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Re: BRK Valuation
« Reply #170 on: July 31, 2020, 12:34:39 PM »
Berkshire purchase of Apple (~253M shares @ $130) less than 3 years ago.  In terms of sheer P&L, this is the greatest trade ever. 


thepupil

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Re: BRK Valuation
« Reply #171 on: July 31, 2020, 03:40:02 PM »
Naspers -700HK $32mm to $180B and the Louisiana Purchase are still kicking warrens ass but as far as $30B stock picks go, I’d agree.

I, for one, one would be very okay with some tax inefficient trimming, but knowing WEB, that probably won’t happen.

Jurgis

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Re: BRK Valuation
« Reply #172 on: July 31, 2020, 04:53:52 PM »
I, for one, one would be very okay with some tax inefficient trimming, but knowing WEB, that probably won’t happen.

Holding stocks - even forever stocks like AAPL - in taxable accounts sucks.

But then I tax-efficient trimmed AAPL something like 20+% lower. So maybe the right thing is not to trim...  ::)
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ValueMaven

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Re: BRK Valuation
« Reply #173 on: August 02, 2020, 07:28:21 AM »
RationalWalk posted this on twitter - interesting way to look at it

Every $BRKA share has an indirect position of ~153 $AAPL
Every $BRKB share has an indirect position of ~0.102 $AAPL

It's easy to calculate your indirect ownership interest in Apple.

Buffett owns ~248,741 BRKA, so he indirectly owns a bit over 38 million AAPL worth ~$16 bn

John Hjorth

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Re: BRK Valuation
« Reply #174 on: August 02, 2020, 07:43:15 AM »
Holding stocks - even forever stocks like AAPL - in taxable accounts sucks.

But then I tax-efficient trimmed AAPL something like 20+% lower. So maybe the right thing is not to trim...  ::)

It all depends [ : - ) ] [on the local tax system].
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ValueMaven

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Re: BRK Valuation
« Reply #175 on: August 02, 2020, 07:58:28 AM »
https://www.wsj.com/articles/private-equity-firms-discuss-bid-for-kansas-city-southern-11596223106?st=anc0qqplbu68up3&reflink=article_copyURL_share

Private-Equity Firms Discuss Bid for Kansas City Southern
Blackstone’s infrastructure arm and Global Infrastructure Partners explore potential deal

Would love to see the multiple they put on this much lower quality rail and how that translates to BNSF ....

Xerxes

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Re: BRK Valuation
« Reply #176 on: August 02, 2020, 01:04:05 PM »
Naspers -700HK $32mm to $180B and the Louisiana Purchase are still kicking warrens ass but as far as $30B stock picks go, I’d agree.

I, for one, one would be very okay with some tax inefficient trimming, but knowing WEB, that probably won’t happen.


Purchase of Booking.com by Priceline
Purchase of Instagram by Facebook
Investment in Alibaba by Softbank

in the latter case, it wasn't so much about finding Jack Ma, i doubt there were many tech entrepreneur in China in the 90s, so that wasn't the hard part relatively speaking.
i think the hard part was holding unto it through IPO in 2014 and beyond.
« Last Edit: August 02, 2020, 01:05:52 PM by Xerxes »

thepupil

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Re: BRK Valuation
« Reply #177 on: August 02, 2020, 01:19:01 PM »
https://www.wsj.com/articles/private-equity-firms-discuss-bid-for-kansas-city-southern-11596223106?st=anc0qqplbu68up3&reflink=article_copyURL_share

Private-Equity Firms Discuss Bid for Kansas City Southern
Blackstone’s infrastructure arm and Global Infrastructure Partners explore potential deal

Would love to see the multiple they put on this much lower quality rail and how that translates to BNSF ....

Without getting too in the weeds, at current KSU multiples, I get to an implied BNSF equity value of $120-$130B

But a better comparable is probably already available in UNP which is very similarly sized and is at $117B equity value/ $145B EV

I think rails are potentially overvalued given the macro backdrop, but lazily plug in UNP as a BNSF proxy and then apply a lazy 0-whatever I’m feeling % discount

Note that Buffett has called Apple his third largest business in February 2020 and that’s worth $100B now, just one data point. I think he meant “3rd largest by value”. The insurance value includes all the others so by definition it’s the biggest. So I think Warren was saying “BNSF is worth more than 5.7% of AAPL”
https://www.google.com/amp/s/www.cnbc.com/amp/2020/02/24/warren-buffett-says-apple-is-probably-the-best-business-i-know-in-the-world.html

$100 bilsky’s ish is a nice simple market value for BNSF.
« Last Edit: August 02, 2020, 01:23:22 PM by thepupil »

ValueMaven

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Re: BRK Valuation
« Reply #178 on: August 02, 2020, 03:45:57 PM »
yes - but my point was that if he really views it as Berk's 3rd largest biz - he is unlikely to sell anytime soon

thepupil

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Re: BRK Valuation
« Reply #179 on: August 03, 2020, 06:11:57 AM »
yes - but my point was that if he really views it as Berk's 3rd largest biz - he is unlikely to sell anytime soon
I agree, I don't see him trimming at all and would be surprised. Just commenting on how WB thinks about the relative value of something we know the market value off (5.7% of AAPL) and the private BNSF and providing some context on BNSF comps.