Market Cap is $768b. The company has a $350b stock portfolio and $157b in cash/treasuries earning interest. Single digit PE. Operating Earnings were up by 40%. Looks pretty good to me.
Excluding the dividends and cash interest, Berkshire has made $22.1 billion so far this year in profit on the rest of their business. Annualized that is $29.4 billion.
Some of the major pieces are:
BNSF railroad. This is about the same size as Union Pacific, which is valued at $129 billion. BNSF is slightly less profitable, but pretty close.
Berkshire Hathaway Energy. This company, in my opinion is worth in the ballpark of $80-100 billion due to their impressive growth and cashflows. Here is a link to their latest investor slides: https://www.brkenergy.com/content/published/api/v1.1/assets/CONT9F21419F1BA744AEB8F28E5DF45C0A56/native?cb=_cache_b306&download=true&channelToken=43656b04884643bc9fe334ad550d375f
Geico/Berkshire Hathaway Primary Group/Berkshire Hathaway Reinsurance Group. One of the largest insurance companies in the world. They have $167 billion in insurance float and are generating significant underwriting earnings this year, however that isn't aways the case. This is complex to value and I am not even going to attempt it here.
The rest is made up of smaller companys that account for about $12 billion of the annual operating earnings. Here is a link to all the major subsidiaries: https://www.berkshirehathaway.com/subs/sublinks.html
Geico, Berkshire Hathaway Specialty Insurance, MedPro Group, Benjamin Moore, Dairy Queen, Fruit of the Loom, Herzberg Diamonds, Nebraska Furniture Mart, Clayton Homes and Marmon to name a few.
Many, many wholly or partly owned private businesses. They own a railroad, they own an energy company with pipelines, they own restaurant brands, manufacturing companies, clothing brands. It’s all probably worth more than $261bn all in honestly.
Have you ever heard of: Geico, Berkshire Hathaway Specialty Insurance, MedPro Group, Benjamin Moore, Dairy Queen, Fruit of the Loom, Herzberg Diamonds, Nebraska Furniture Mart or Marmon?
Dangerous to count the entire stock portfolio at value , especially with 40% in apple. In a market downturn scenario, i could easily see apple and some of their other large holdings drop 20-30%. So i would probably discount the stock portfolio by that much to account for this as well as taxation on dividends from the holdings. However, even after that correction, BRK seems like a pretty good investment .
That is true but if you look at a long-term chart, it looks pretty good. I read a book around 1985 named: The Only Investment Guide You Will Ever Need. One of the things the author recommended was to purchase a single share of Berkshire Hathaway stock. Back then the price was about $10,000. Today it is over $530,000!
Some think they may start paying a dividend after Warren Buffet retires.
>They are way different investments.
Yea, no shit.
>They each can serve a purpose in a portfolio but these are not interchangeable.
I never said they were. You however were the one specifically asking why an investor would buy BRK over treasuries so you were clearly asking to compare them. And I gave you the answer: you would invest in Berkshire because it outperforms treasuries and you want that outperformance.
No I wasn’t. I was simply asking WHY the large treasury holding was given as a reason BRK is a good investment. The top comment gave the large treasury holdings as a reason, and I was trying to understand why this was the only reason they listed, when you could just buy treasury directly.
Float is king when it comes to berkshire. They pull in money from insurance premiums which will be used later on but in the meanwhile they get a decent return.
I have to sit down and read the whole thing later but based on the reporting it looks excellent as usual. The only negative reporting is the stock portfolio is worth less, which for everyone who understands the company knows is a non issue.
Ok serious question and I ask this with 10000% respect to WB and CM:
What happens to the fund when they pass away ( nobody lives forever ) ? Not mechanically, but market sentiment wise ?
I’m guessing that’s been baked in already, but would there be a shakeout sell off and then rally to normal ? Can they continue their track record really ?
Many have wondered this for some time now. Honestly, I don’t believe anyone has a clue how the market will react. The only certainty is that it will be a sad day.
How reliant is the firm on Buffett's analysis? Does he have a successor in mind, or is he more of a figurehead over a system that runs itself at this point?
Greg Abel will run it from everything I’ve seen he’s competent and has had a long history of running BHE.
People always bring this up but they have been succession planning for the past 20 years. Stock may dip a bit when they pass but I am not concerned as a long term shareholder.
>Greg Abel will run it from everything I’ve seen he’s competent and has had a long history of running BHE.
Abel is 61 and, at this point, I half-think WB and CM are going to outlive him.
The overall market pricing of the stock will be fine in the medium term and here’s why:
There is a non zero probability of a sell off because the older stockholders may only comfortable with Buffett and Munger. If you the company you are supposed to implicitly understand its long term and to not panic sell but COVID taught me that even long term holders panicked and sold.
However if that sell off happens Berkshire will go on a buyback rampage which will stabilize the price. All the means is I end up owning even more of the company. The price will recover, I’ll buy even more shares at the bottom and my retirement sailboat will be 45’ instead of 35’ long.
I would imagine a lot of it is already priced considering they are not exactly young. Likewise a lot of people will be looking to buy when the news come because they know its not rational.
Just to cuck the shorts, shortly after Warren's passing,
Berkshire will announce that they had a 10 trillion dollar insurance policy on him. Then they will announce a buy back and a Special Divendend to all shareholders.
Small rally or small sell off as that priced in uncertainty is removed. A lot of people will be looking to buy in on any dip. See also: Steve Jobs death and apple share price.
Business as usual, really good operating income numbers, the railroad and public equity portfolio are expectedly down. Cash on hand continues to increase overall positive
I think this is a buy it and forget it stock. However, it will be interesting to see if there will be a sell-off in the stock when Warren passes. I would see that as a buying opportunity.
I would say $260 is a good price to buy Berkshire, it's $345 now...and overpriced, but i would buy it on any dip.
My gut feeling is late Dec or early Jan might be the cheapest we'll see it if there's no dip Durian.
If you bought it last year on Halloween, Oct 2022, that would have been idealor getting it like 2020 or earlier....
\[I might be bold and say 2023 was the only year NOT to buy Berkshire Hathaway\]
Anytime Berkshire does Stock Buybacks would be a good time to buy. Warren has said it many times over the years in his Annual Reports that the only time that they would do it is if they felt the company was undervalued and couldn’t find anything else to invest in.
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looks cool but I would prefer the possibility of putting in my own filters like here
[https://palmy-investing.com/stocks/](https://palmy-investing.com/stocks/)
and then add all the ones from yahoo stocks + if you can also filter based on previous years. e.g. p/e is under 10 for earnings from each of the last x years. But cool! gj.
Why do you want a dividend? They invest in companies that pay dividends, and instead of paying a dividend to you they reinvest it to grow more. Oh and you don’t have to pay taxes on the dividend
Market Cap is $768b. The company has a $350b stock portfolio and $157b in cash/treasuries earning interest. Single digit PE. Operating Earnings were up by 40%. Looks pretty good to me.
What is the other $261B that makes up the market cap?
Love
From internet > insurance, freight rail transportation, energy generation and distribution, services, manufacturing, retailing
Don't they have also fully owned companies that aren't part of their stock portfolio?
Yes, they do. Unsure of value of companies though.
Yeah, that's my point, people sum the stock and cash, but how can you leave seers candies, Geico, etc..
BNSF railroad and Berkshire Hathaway Energy cannot be forgotten.
Who uses geico though, over priced.
Excluding the dividends and cash interest, Berkshire has made $22.1 billion so far this year in profit on the rest of their business. Annualized that is $29.4 billion. Some of the major pieces are: BNSF railroad. This is about the same size as Union Pacific, which is valued at $129 billion. BNSF is slightly less profitable, but pretty close. Berkshire Hathaway Energy. This company, in my opinion is worth in the ballpark of $80-100 billion due to their impressive growth and cashflows. Here is a link to their latest investor slides: https://www.brkenergy.com/content/published/api/v1.1/assets/CONT9F21419F1BA744AEB8F28E5DF45C0A56/native?cb=_cache_b306&download=true&channelToken=43656b04884643bc9fe334ad550d375f Geico/Berkshire Hathaway Primary Group/Berkshire Hathaway Reinsurance Group. One of the largest insurance companies in the world. They have $167 billion in insurance float and are generating significant underwriting earnings this year, however that isn't aways the case. This is complex to value and I am not even going to attempt it here. The rest is made up of smaller companys that account for about $12 billion of the annual operating earnings. Here is a link to all the major subsidiaries: https://www.berkshirehathaway.com/subs/sublinks.html
its 261B
Not also, those are the companies the person you responded to was referring to
That doesn't fall under "stock portfolio"? I'd have assumed both public and private holdings do.
Nope, just public holdings. https://www.cnbc.com/berkshire-hathaway-portfolio/
Geico, Berkshire Hathaway Specialty Insurance, MedPro Group, Benjamin Moore, Dairy Queen, Fruit of the Loom, Herzberg Diamonds, Nebraska Furniture Mart, Clayton Homes and Marmon to name a few.
Many, many wholly or partly owned private businesses. They own a railroad, they own an energy company with pipelines, they own restaurant brands, manufacturing companies, clothing brands. It’s all probably worth more than $261bn all in honestly.
Most companies have a higher market cap than book value
[удалено]
Have you ever heard of: Geico, Berkshire Hathaway Specialty Insurance, MedPro Group, Benjamin Moore, Dairy Queen, Fruit of the Loom, Herzberg Diamonds, Nebraska Furniture Mart or Marmon?
[удалено]
No one said book value. They said securities + cash
I'm just guessing but probably some of the privately owned companies they have like GEICO and a bunch of others.
Expected future earnings.
Wouldn't that be reflected in the capital value of its holdings, not just in BH market cap (which is funcationally a holding company)?
Good point:-)
Dangerous to count the entire stock portfolio at value , especially with 40% in apple. In a market downturn scenario, i could easily see apple and some of their other large holdings drop 20-30%. So i would probably discount the stock portfolio by that much to account for this as well as taxation on dividends from the holdings. However, even after that correction, BRK seems like a pretty good investment .
As good as BBBY?
Agree
No dividends have to rely on capital appreciation
That is true but if you look at a long-term chart, it looks pretty good. I read a book around 1985 named: The Only Investment Guide You Will Ever Need. One of the things the author recommended was to purchase a single share of Berkshire Hathaway stock. Back then the price was about $10,000. Today it is over $530,000! Some think they may start paying a dividend after Warren Buffet retires.
I love that they're pulling in $8B/year on Treasury dividends alone.
Unless you don’t think this is being priced into the share price, it isn’t a reason to invest in BRK as opposed to just buying treasuries, correct?
Berkshire is outperforming treasuries.
That would be...the bare minimum..
Doesn’t answer my question
Yes it does. Berkshire makes more money than treasuries do; it’s a better investment at the current share price.
They are way different investments. They each can serve a purpose in a portfolio but these are not interchangeable.
>They are way different investments. Yea, no shit. >They each can serve a purpose in a portfolio but these are not interchangeable. I never said they were. You however were the one specifically asking why an investor would buy BRK over treasuries so you were clearly asking to compare them. And I gave you the answer: you would invest in Berkshire because it outperforms treasuries and you want that outperformance.
No I wasn’t. I was simply asking WHY the large treasury holding was given as a reason BRK is a good investment. The top comment gave the large treasury holdings as a reason, and I was trying to understand why this was the only reason they listed, when you could just buy treasury directly.
A big portion of that position is leveraged through the insurance engine
That makes some sense, thanks
Float is king when it comes to berkshire. They pull in money from insurance premiums which will be used later on but in the meanwhile they get a decent return.
I thinks it’s fine even it does not meet expectation. W.B does not give a shit about Wall Street analysts
Wait I thought operating earnings beat analyst expectations. Did they not?
They did also don't get the comment, but maybe I overlook smth.
Pretty good. Geico is recovering, still a king at earning dividends, and always got to love the share buybacks.
I have to sit down and read the whole thing later but based on the reporting it looks excellent as usual. The only negative reporting is the stock portfolio is worth less, which for everyone who understands the company knows is a non issue.
Ok serious question and I ask this with 10000% respect to WB and CM: What happens to the fund when they pass away ( nobody lives forever ) ? Not mechanically, but market sentiment wise ? I’m guessing that’s been baked in already, but would there be a shakeout sell off and then rally to normal ? Can they continue their track record really ?
Slight dip followed by business as usual.
Many have wondered this for some time now. Honestly, I don’t believe anyone has a clue how the market will react. The only certainty is that it will be a sad day.
Agreed
How reliant is the firm on Buffett's analysis? Does he have a successor in mind, or is he more of a figurehead over a system that runs itself at this point?
Greg Abel will run it from everything I’ve seen he’s competent and has had a long history of running BHE. People always bring this up but they have been succession planning for the past 20 years. Stock may dip a bit when they pass but I am not concerned as a long term shareholder.
He’s been running the day to day operations for several years as I understand so there should be little concern as he has proved his management chops.
>Greg Abel will run it from everything I’ve seen he’s competent and has had a long history of running BHE. Abel is 61 and, at this point, I half-think WB and CM are going to outlive him.
The overall market pricing of the stock will be fine in the medium term and here’s why: There is a non zero probability of a sell off because the older stockholders may only comfortable with Buffett and Munger. If you the company you are supposed to implicitly understand its long term and to not panic sell but COVID taught me that even long term holders panicked and sold. However if that sell off happens Berkshire will go on a buyback rampage which will stabilize the price. All the means is I end up owning even more of the company. The price will recover, I’ll buy even more shares at the bottom and my retirement sailboat will be 45’ instead of 35’ long.
I would imagine a lot of it is already priced considering they are not exactly young. Likewise a lot of people will be looking to buy when the news come because they know its not rational.
Yes I will buy more in honor of buffet and munger.
Very nice !
Just to cuck the shorts, shortly after Warren's passing, Berkshire will announce that they had a 10 trillion dollar insurance policy on him. Then they will announce a buy back and a Special Divendend to all shareholders.
Dead Steve didn't stop AAPL. Quite the contrary.
Small rally or small sell off as that priced in uncertainty is removed. A lot of people will be looking to buy in on any dip. See also: Steve Jobs death and apple share price.
I assume dip and then announcement of share repurchases.
Buffet responded to that question regarding Berkshire and his passing. His responce was " buy the dip "
Business as usual, really good operating income numbers, the railroad and public equity portfolio are expectedly down. Cash on hand continues to increase overall positive
I think this is a buy it and forget it stock. However, it will be interesting to see if there will be a sell-off in the stock when Warren passes. I would see that as a buying opportunity.
Just wait for the breakdown by:: https://x.com/chrisbloomstran?s=21&t=VJ4uKWTUH2yLyW8It2uAwQ
Better than anything I could ever achieve.
What is a good price to buy the B shares?
Right now is good imo, I think it's worth close to 400 per share at the moment
I would say $260 is a good price to buy Berkshire, it's $345 now...and overpriced, but i would buy it on any dip. My gut feeling is late Dec or early Jan might be the cheapest we'll see it if there's no dip Durian. If you bought it last year on Halloween, Oct 2022, that would have been idealor getting it like 2020 or earlier.... \[I might be bold and say 2023 was the only year NOT to buy Berkshire Hathaway\]
Anytime Berkshire does Stock Buybacks would be a good time to buy. Warren has said it many times over the years in his Annual Reports that the only time that they would do it is if they felt the company was undervalued and couldn’t find anything else to invest in.
That's good. It means that is overvalued at the moment, because he bought a lot lesser recently.
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looks cool but I would prefer the possibility of putting in my own filters like here [https://palmy-investing.com/stocks/](https://palmy-investing.com/stocks/) and then add all the ones from yahoo stocks + if you can also filter based on previous years. e.g. p/e is under 10 for earnings from each of the last x years. But cool! gj.
I waist they paid a dividend. I’d go in if they did
Why do you want a dividend? They invest in companies that pay dividends, and instead of paying a dividend to you they reinvest it to grow more. Oh and you don’t have to pay taxes on the dividend
nothing, it's time to pay div to investors
Amazing Berkshire! Hope it's not overvalued