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According to Bloomstran we are not that much above his IV estimate. One can only imagine if many of the posters here had owned Costco....take a look at the chart and the valuation. At what price would the "experts", pointing to their valuation analysis, have sold with the comment that they would buy it back when it dropped down to a more reasonable price? BRK just might have a long runway ahead of it.

In a shout out to a long time poster on multiple boards: "$600 or bust!"

At 70.7 years old and a owner of Berk since Jan 10, 1975 I'd be willing make a bet that Costco the business may do quite ok but at some point there will be stock price that will be a "high" that won't be attained again for at least 20 years. Valuation changes, slightly more competition, slightly less capable or successful management...or simply business/social developments overall can make this happen. But to me the valuation of Costco comes very close to assuring this will take place...even if the business stays sound.

As to Berkshire I'd be willing to make a bet that without a home run elephant sized investment that the runway will be very much like the historical runway but at a generally - and again slightly - lower overall valuation and a progressively progressively slower annual gain going forward from here.

Of course I'm not selling, but being realistic is one of the many helpful models that you can stay grounded as to your actions.

Say after this year Costco averages an eps gain of 7% for the next 20 years. Plug in $73 per share in earnings and give it a 14 PE and you have a $1022 stock price. With the price of the stock recently being $1076...

All kinds of things can happen in the US to make a large retail store chain that achieves 7% annual EPS growth over 20 years to be reasonably successful yet without the growth of the past.

Or as Charlie was fond of saying "The key to a happy life is to have low expectations." Very true.

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Berkshire Hathaway FAQ

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