No. of Recommendations: 4
The decision has to be pretty easy right now, with the stock selling at 1.39x Mar 31 BV. In March Berkshire repurchased stock at 1.47x Dec 31 BV, or 1.43x Mar 31 BV. The only question now is how much they are repurchasing. My guess would be similar to the pace in March.
The decision about how many involves more than just IV. They want to buyback under a certain multiple of IV or BV. But even though it is unsaid (I think), they also will only buyback such that it doesn't affect the market trading inordinately. And there's an art to doing that. First off, I think they prefer buying back A shares rather than B shares (but will, of course, buy back B shares as well). And A shares have relatively small volume of only a few hundred a day. So even if they've been buying A shares each day since the end of their self imposed blackout, they may have gotten perhaps 1000 A shares. That's less than $1B. The B shares usually trade 3 to 5 million a day. So even if Berkshire was able to take 5% of the volume, then that's only 4 to 7 million B shares. And that's under $2B. So I'd guess that the buyback is well under $5B, maybe even under $4B this time around.
It's not so easy to buyback large amounts of shares of a relatively thinly traded company. For a company like Apple, on the other hand, because it trades 40, 50, even 90 million a day sometimes, it's a lot easier to buyback A LOT of shares in a single quarter.
And it stands to reason that Berkshire is relatively thinly traded. Because a very large percentage of holders are long-term and much fewer are short-term holders. I always liked the idea of Berkshire buying back from estates that "have to" sell long held shares. And I'm still mystified why there was no deal for Berkshire to easily be able to buyback shares from the foundations when they sell each year.
