Post #14212 by mungofitch on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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. As it's turned out there's perhaps no reason for a higher value now, but I would still see 1.5-2.0x as the fair value area. That leaves under 1.5x as cheap and above 2.0x as expensive. Just my 2p, obv.

I think assuming that true fair value is over 1.5 times book seems plausible. I just always like to make the clear distinction between fair value and what the stock is most likely to trade at, which seems to be considerably below 1.5 times book on average. Lacking any better information, my guess is that that will remain true.

In that one sense, Berkshire is a lot like a closed end fund that is always trading at a discount...as mentioned in another thread this week, getting it at a discount to fair value doesn't actually benefit you at all if the discount remains. It's only the rate of change of value that matters to your return.

Jim

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