Subject: Re: Buybacks have begun
What am I missing?

I haven't seen anybody suggest this so I'd like to throw it against the wall and see if anybody salutes.

Could it be that the ratio of BRK's IV to Book has increased over the last few years? And that's what we'all are missing?

As evidence for this:

1) I remember probably a year or two ago it seems to me Mungofitch made some comments to the effect that some new tax reporting thing or another should have increased BRK's value vs Book to a higher ratio

2) If you have looked at the time-series for Price/Book over the last 25 years, as I have, you will see in the last year or three it seems to have risen to the high end of the range it usually covers, and not fallen from there as soon as it generally did in the past

3) BRK currently seems to rise in price when the rest of the market is weak and decline a bit in price when the rest of the market is strong. Even though its general level is relatively close to 1.6 Price/Book

and perhaps most importantly

4) The CEO of Berkshire recently stood there and told us: BRK is trading a bit below its IV right now.

To me, the biggest risk is that Greg is behaving in a way that Warren wouldn't really love, but that Warren is being a good ex-CEO and giving Greg as much leash as he may need to either do what he needs to do or to hang himself. But this whole transition process has been spread out over such a long time I have pretty good faith in it. I also have my own pet theory that BRK should go up in price as a new CEO leans away from doing idiosyncratic things just because they make sense to him. Heck, if hclasvegas is right, he might put a 2-bit dividend on the A-shares just to make them more attractive to the hoi polloi.

R:)