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From Barron's...

"The stock now trades for 1.7 times its June 30 book value of around $419,000 per Class A share and for 24 times the earnings per share expected for 2024.
The price-to-book ratio is close to the highest it has been over the past 10 years and above the average of about 1.4 times for the past five years.
The price/earnings ratio is also above its 10-year average."

"While investors have been buying Berkshire, Buffett appears to be lukewarm on the stock. Berkshire repurchased just $345 million of stock in the second quarter,
down from about $2.6 billion in the first quarter. It was the lowest quarterly total in more than five years and a fraction of the peak level of $27 billion seen in 2021."

"Berkshire has topped the S&P 500 over the past one, five, 10, and 20 years."

https://www.marketwatch.com/articles/berkshire-hat...

It does look a little more richly valued than usual. That doesn't mean you should sell, but it does mean you probably shouldn't really expect the price to be higher a year from now.

My best super-simple back of the envelope---

20 year average ratio of price to peak-to-date known book per share: 1.397.
(Same figure today: 1.714)

Typical growth in real peak-to-date known book per share last 20 years: a bit over 8%/year. (higher than 8%/year for 60% of four year intervals, lower than 8%/year for 40% of the time).
Real book today: $418806
Not-bad guess of real book a year from now, today's money, simply by adding 8%: $452300
Apply the 20-year average P/B to that price to get a somewhat plausible price a year from now: $631743, or $421.2 per B, measured in today's money.

Current price per B is $478.57 as of yesterday's close.
So, that "reasonable expectation" line of reasoning suggests that the next year might get you a real return of only inflation minus -12.0%.
(Since a 12% one year drop is more than the usual 8% annual real value growth, the 2 year outlook isn't fantastic either)

Obviously valuations might be higher or lower than typical a year from now, but that's sort of a 50/50 chance more or less by definition. Maybe valuation multiples will be higher in the next few years than was typical in the last 15-20, but there is no way to forecast that.

We certainly might see another good year for the stock price, as prices can do anything, but I don't see any particular reason to expect it.

Jim

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