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- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 1
BRK-B looks to be creeping up on its high of 485.
Yeah, I daily regret getting partially out 432.
I've had a GTC sell at 475, I think maybe I should cancel that, we're only $8 away.
What do you think, will it skyrocket after hitting 500? People jumping in because FOMO?
No. of Recommendations: 15
People jumping in because FOMO?
One theory
(1) People jumping into the broad US stock market because FOMO
(2) BRK rising because it's glued into the cap weight funds they're buying
Berkshire's price has risen almost precisely as fast as the average S&P 500 firm in the last 6 or 12 months. An even closer match with the insurance industry, e.g. KIE. So maybe Berkshire's strong price has nothing at all to do with what people think of Berkshire as such.
The possible corollary that springs to mind is that not all of Berkshire's price rise is "intrinsic"---some may unwind for a while if the broad market decides to have a bad stretch. But not right away, probably: statistically, it's very rare to see a meaningful and lasting market drop soon (even up to a few months) after a fresh recent high.
Jim
No. of Recommendations: 0
Poll : What will we see first $5XX or $3XX ? (for the B shares)
tecmo
...
No. of Recommendations: 0
Who knows but my guess is we touch $500+ before $399 based on strong momentum last couple years, macro, folks seem to be shifting more into equities/ index funds, perceived safety in BRK and we often seem reach higher highs before cooling off. Will be an interesting few months & hope there is not a melt up.
No. of Recommendations: 2
Nobdoy knows is right. I am not sure it will skyrocket but it is in a zone of reasonableness and trying to buy in and out isn't easy.
I think on average your best bet is to sell what you need for the next month (if you need it) and let the rest ride. Maybe sell off 2-5 months if it runs really high but I don't think it is that bad to hold this up to the 1.8-2.0x BV range.
Where do you think it will be in 18 months? That's what really matters for 95% of your holdings. The market can be slightly irrational for a long time. In fact it is probably that more often than not.
Just hold the darn thing. :)
No. of Recommendations: 13
Or a pretty substantial recent revaluation of one of Berkshire's most significant businesses after Insurance: Utilities.
A flat growth industry nationally is now pegged as a double digital longer term growth industry. AI and EVs are here to stay. Demand is assured to grow. A lot. If you own a fund heavily weighted with utilities, your fund went from a boring income vehicle to an ultra-growth fund. So that's reflected in Berkshire's valuation.
Oh, and Berkshire's runaway #1 business, Insurance is not too unattractive these days. The only business where customers do cartwheels to celebrate premium increases of only 12%.
There are are very significant reasons why Berkshire stock is attractive to investors this year, and the earnings outlook is attractive.
No. of Recommendations: 9
One theory
(1) People jumping into the broad US stock market because FOMO
(2) BRK rising because it's glued into the cap weight funds they're buying
Then there’s
(3) What else is there to buy, with the whole market so high?
From current prices, you can expect low returns from Berkshire, but you can expect even lower returns from the S&P. As Munger has advised, “lower your expectations.”
DTB
No. of Recommendations: 4
From current prices, you can expect low returns from Berkshire, but you can expect even lower returns from the S&P. As Munger has advised, “lower your expectations.”
My take: with BRK you get your earnings yield of 3% plus your inflation of the money supply at 7% plus some real earnings growth at say 4% for a total (WAG) return of 14%. We live in a different world now. Is there any doubt that the government has every intention of running massive deficits and printing like never before? Cash and bonds are negative yielding after debasement - they need to go to 10% to be competitive with equities.
