No. of Recommendations: 5
Where will the price of BRKB go in the next six months? We have all watched the volatility of BRKB stock this year. There have been several major moves. First an 18% rise from Jan 1st to Apr 2nd, and then a 9% drop after Trump announced major tariffs on Apr 2nd. Then the stock recovered back to the Apr 2nd level, before falling 10% since the annual meeting on May 3rd.
I think that two shockers at the annual meeting spurred the latest downturn: first, of course, the announcement that Buffett will step down as CEO. No one is as skilled as Buffett at compounding book value. And second, Buffett's explanation for the lower purchase price of BHE from the Walter Scott family in 2024 as compared to the purchase of Greg Abel's BHE stock in 2022. Buffett simply stated that, "Sometimes the value of a company declines." But what a decline, from an $87 billion valuation to a $49 billion valuation, a decline of $38 billion.
With the 10% decline in BRKB stock since the annual meeting, the stock is now roughly fairly valued, at 1.59x BV, versus a fair value of about 1.56x BV. Before the annual meeting the stock had gotten up to 1.75x BV.
As to the question of where BRKB stock will go in the next 6 months, my guess is that it will continue to decline. I suspect that traders will want to see what happens in the next 6 months, and also in the first 12 months of Abel's tenure. Just a guess.
No. of Recommendations: 1
Who knows but I wouldn’t mind a further drop to $400-425 to possibly reignite the buybacks in size perhaps and also give us all a chance to add. I imagine Warren & Greg would quietly be delighted with a 15-20% near future further drop in price, esp. given all the cash equivalents waiting patiently for action.
No. of Recommendations: 7
A couple of possible answers
(a) Nobody knows. Prices can do anything in the short term.
(b) Six months from now, $440.522 per B share in today's money.
It's likely that one of those is a little less precise (though more accurate) than you would like, and the other a little more precise (but less accurate), so just interpolate to taste : )
Jim
Second answer is a six month extrapolation of the 20 year trend line of log real book per share, times the 20 year average trailing P/B ratio, all at CPI 320.8
So, barring better knowledge, it's a sensible starting guess.
