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Did anybody do an estimate of year end book per share?

I estimated the change in the equity portfolio prices bumped book by $20010/share. Call it "around 20k".
With a seasonal adjustment, after tax earnings on "steady things" might be expected to be around $5840/share.
That's after-tax profit in rails, utilities, manufacturing/service/retail, and a figure for cyclically adjusted underwriting profit.
That would put book per share a little over $389000, an remarkable (implausible?) 25% higher than a year earlier. The market value of the Apple position rose something like $57.3bn in the calendar year, just over half my quick estimate of the rise.

Any better guesses out there?

Jim

Any better guesses out there?


Better? Not likely. But here is what my year end tea leaves say.

The tracking I use for the equity portfolio shows it was up $31.2B after tax for $22,830/shr.

My guess for steady things is $8.27B after tax for $5730/shr.

Add it all up for a total quarterly increase of $27,332 to $390,745 book value per A share or about $260.50/B.

My tea leaves have been steadily under estimating book for at least the last year though, so I would not be surprised to see it come in higher. The uptick in underwriting performance as well as the increased interest earned on cash, I think, have been the main drivers of the under estimations, but offset somewhat by the provisionals at PacifiCorp.

Any thoughts on IV? It seems like the Ops earnings being under trend could directly offset any haircut needed to the Apple position. I would put IV in the $562,000 to $570,000 per A share range ($375-$380 in Bs)

Jeff

Any thoughts on IV? It seems like the Ops earnings being under trend could directly offset any haircut needed to the Apple position.

I track the value of Apple based on a multiple of its earnings rather than its stock price, as if it were a subsidiary, so the big run-up in book from that won't show up in my IV estimate.
So the growth in my IV estimate will be way lower than the growth in book value. (Apple's P/E averaged 12.5 in the five years to 2016 while earnings were rising at about 17%/year--I'd rather not be unpleasantly surprised if that should become the norm again!)
Same for a few smaller positions, too--I'll probably be shaving around $36 billion total off the market value as a cyclical adjustment when I assign a value to the equities portfolio. Q3 last year I took off only $11bn.
That's about all I know at the moment--most of my IV estimate inputs will require seeing the year end statements. I hope the utilities are doing better.

As for aggregate operating earnings, on an after-inflation basis they have been way below my expectations for about six quarters now, net income lagging at a rate of over $3000/share/year, so I'm hoping (yet again) for a pleasant surprise.

Actually I wrote the wrong estimate for Q4 for the operating earnings. That was my Q3 estimate.
My estimates for Q4 for the "smooth things" is around the range $4635 per share. Q4 is usually quite a bit weaker than Q3.
But this doesn't include a lot of things. Interest income. And whatever unusually good or bad things are happening in underwriting.

And of course a lot of the assets other than mark-to-market securities are now worth more in nominal terms due to inflation (measuring anything with smaller dollars will do that), even though their carrying values won't have budged. In that one sense, real book value growth is an underestimate of real IV growth for a lot of things.

But taken all together, I expect that it will have been a below-average year for real value growth aside from the bump in the market value of the equities.
At the moment I expect 2024 to be the same again for real IV growth: poorer than average. But up.

Jim

Jim, does your year-end estimate of BRK's book include:

1. The investments in the five Japanese trading houses, and

2. The "several billion dollars in profit" (assuming no supercat losses in Florida), that Ajit Jain forecast at the Annual Meeting?

Thanks,
Philmordun

Jim, does your year-end estimate of BRK's book include:
1. The investments in the five Japanese trading houses, and
2. The "several billion dollars in profit" (assuming no supercat losses in Florida), that Ajit Jain forecast at the Annual Meeting?

Nope.
I count the trading house holdings as part of the "unknown" investments per share.
In this case, to estimate book for equities not itemized in the 10Q I just estimate that it gave the same return as the average S&P 500 firm when trying to estimate book.
We know how much stock is in the 10Q, and how much the total was at last quarter end, so it's easy to estimate the total (and comparatively small) "unknown" amount. BYD is in there too.
Close enough for rock and roll.

For the underwriting profit, it's nice if it's above average and so is book, but I estimate IV based on an average underwriting profit level, not a good or bad one, which would just make the value estimate volatile.
In this case I used the cyclically adjusted estimate (based on a percentage of float, and as a percentage of premiums earned) as a proxy for estimating book.

Ultimately, I place more weight on my IV estimate than on book for most purposes, though book is a good addition input to short term price prediction even when "distorted".

Jim

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