No. of Recommendations: 11
Warren's conservative estimate of IV can be inferred from his stock repurchases. Berkshire makes fewer repurchases when the P/B is higher, and it has paused repurchases altogether when the P/B is too high, as in April and May of 2022. The highest price/beginning book for the quarter that Warren has paid is 1.49 (which he paid in November 2022), and the highest price/ending book for the quarter that Warren has paid is 1.51 (which he paid in September, 2023). Warren has said that he would not repurchase stock at a "mere" 5% discount to IV, so his repurchase at 1.51 times BV implies an IV of at least 1.59
No. of Recommendations: 2
Here is something that I find interesting. The weighted average buyback price from 2019 to now is: 198.74, 203.53, 269.97, 302.60 and 320.89. They are paying 60% more this year than they did in 2019.
No. of Recommendations: 14
They are paying 60% more this year than they did in 2019. Pretty consistent with this comment in the Forbes article:
https://www.forbes.com/sites/bill_stone/2023/11/04..."Thanks to share repurchases, operating earnings per share for year-to-date 2023 were a whopping 65% above 2019." That's despite railroad and energy both being net down in the interval.
So, round numbers, it seems he's paying more because shares are worth more, not because he is any less price sensitive : )
Book per share is up "only" 49% in the same four year stretch, investments per share up 52% (47% using my adjustments)
Still fine numbers.
Jim
No. of Recommendations: 5
(Sorry, rrr12345, I think my first reply went to your email and not to the board. Meant it for the board.)
Warren's conservative estimate of IV can be inferred from his stock repurchases. Berkshire makes fewer repurchases when the P/B is higher, and it has paused repurchases altogether when the P/B is too high, as in April and May of 2022. The highest price/beginning book for the quarter that Warren has paid is 1.49 (which he paid in November 2022), and the highest price/ending book for the quarter that Warren has paid is 1.51 (which he paid in September, 2023). Warren has said that he would not repurchase stock at a "mere" 5% discount to IV, so his repurchase at 1.51 times BV implies an IV of at least 1.59
I don't know that much can be inferred from stock repurchases, other than there is excess cash and the price is within a zone of reasonableness.
The last 2 quarters they've bought more when the price has gone up (though only by single digit %).
2023 #A Price A
Apr 177 $472,004.70
May 238 $493,507.36
Jun 627 $506,476.84
Jul 177 $521,430.04
Aug 607 $541,740.69
Sep 1115 $550,813.96
No. of Recommendations: 1
The trend of buying more when the P/B is lower is clearer we plot all the repurchases, and also the upper limit of P/B is more obvious. Unfortunately I can't upload a spreadsheet.
