Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 3
Now at $403 billion even after the recent apple sales (although it is likely more has been sold over last few weeks).
Two simplified book-end perspectives on the value (to its owner) of publicly listed securities:
1. For a long term holder without the possibility of monetizing the stake: business valuation is the only way to go because you are interested only in what the business can provide to you between now and judgment day. Market prices are less relevant (they may still impact some business decisions like capital raises or employee ownership plans).
2. For an owner of a small stake of stock in a tax free account (small enough to be sold in an instant - think retail investor): you may still engage in business valuation and conclude the stock is worth more than its price. But the current market price is the best proxy for the minimum value of the stock to you. After all you can instantly convert it to cash at the current market price.
To an owner of Berkshire Hathaway, the value of its stock portfolio has remained closer to the category one camp - I can't impact its sell decisions and the CEO's favored holding period is forever. They have also historically been reluctant to sell for business valuation reasons, e.g. KO in late 90s. But with recent apple sales (although tax was offered as to the reason for selling), I think its warranted to move a bit closer to category two and let ourselves be somewhat more informed by market prices than by business valuation when answering the question "what is it worth to me".
No. of Recommendations: 1
"But with recent apple sales (although tax was offered as to the reason for selling), I think its warranted to move a bit closer to category two and let ourselves be somewhat more informed by market prices than by business valuation when answering the question "what is it worth to me"."
We shall see how much more Apple was sold. many have called for it to be sold down but so far all sales have been much lower than the current quote.
No. of Recommendations: 1
“We shall see how much more Apple was sold. many have called for it to be sold down but so far all sales have been much lower than the current quote.”
AAPL was up 27% I believe in Q2. I’d imagine WEB was committed to further trimming and it would not surprise me to soon learn he trimmed a similar amount in Q2 as Q1 (13% trim) esp. given the AAPL price appreciation. He seemed to telegraph further trimming at the AGM despite his love of the business & he’s been a noteworthy net seller of equities over the last few quarters. Will be interesting to see what he did next month.
No. of Recommendations: 10
Agree. And Buffett did something he rarely does—give forward cash balance guidance. I think he did that knowing even if a buying opportunity or 2 popped up pre 6/30–$200 Billion cash was still where we were headed. He guided to that number at the AM.
And Warren’s $200 Billion cash balance guidance was given when..
A.) Apple was substantially lower.
B.) Buffett announced he had already dumped a ton of Apple.
C.)Since, Berkshire stock has traded around the very “high end” of previous buyback prices—certainly not a compelling buy-in attraction…just “OK”
D.) Since the AM, the stock market, not attracting net Berkshire purchases at lower valuations, has raced higher.
So the question is: where will “Berkshire Cash” stand as a standalone S&P 500 Company? It’s about a top 60 S&P “company” now. We BEGIN that conversation at $200 Billion. And the cash coming in to Omaha each week shows no signs of slowing.
The 6/30 cash # could be staggering.
No. of Recommendations: 0
" We BEGIN that conversation at $200 Billion. And the cash coming in to Omaha each week shows no signs of slowing."
Not sure this is really great news... yes earning 5% pre tax and before inflation but would rather have it deployed. Of course, where is the trick
