No. of Recommendations: 21
I don't usually bother to try to forecast book per share any more, but FWIW my guess for June 30 is $421,100.
That's calculated as Q1 book per share, plus an after-tax estimate of the gains in the equity portfolio assuming no price changes in the next couple of weeks, plus an estimate of the after-tax "steady things" operating earnings: what a typical Q2 might look like for rails, utilities, manufacturing/service/retail, and cyclically adjusted underwriting profits.
Almost 80% that quarterly gain in book arises from the roughly $33.6bn rise in the market value of the Apple position. I don't think the value of the Apple position rose that much, but the price did, so it feeds into book value.
The current market price of $615,000 is 1.460 times that number. FWIW, that multiple is 7.9% above the 15 year average, before any consideration of whether Apple is ahead of itself. My models have big error bars, as prices can do anything for a while, but they suggest the next year will most likely have a single digit negative real return from here. Both the models based on book per share, and the models based on more on earnings. Range -10.6% to +0.7%, median model giving -7.5%. That will as usual be wrong, but the notion is that it's a 50/50 shot whether it's too low or too high.
Jim
