Subject: IV by the repurchase method
Buffett's estimate of IV can be inferred from the number of shares that he repurchases during a quarter. Plots of A-share equivalents repurchased against the beginning P/B for the quarter and against the ending P/B for the quarter show definite downtrends, although with considerable scatter, and also show the highest P/B at which he has been willing to repurchase stock. The highest P/beginning-book is 1.49, and the highest P/ending-book is 1.48. The question is whether 1.48 and 1.49 represent 5% discounts to his estimate of IV or 10% discounts to his estimate of IV. Decide for yourself. Buffett has stated that he would not repurchase stock at a 5% discount to his estimate of IV, but would buy back significant amounts of stock at a 25% or 30% discount to IV.