No. of Recommendations: 8
I thought I'd share some charts regarding Berkshire's price and BV history. The first chart shows price and BV per A-share from Oct '64 (fiscal year end) to Dec '24. (I estimated BV for Dec '24 to be about $451K.) The knees in the curves at 1975 and 1999 also appear if one plots the S&P 500 index versus time. The second chart, P/B, shows the high and low price for the quarter to the ending BV. I apologize that you have to copy and paste the link. This is my first time trying to use a Google account to share documents.
https://docs.google.com/document/d/1fjyrqEMxDyhtTz...The third chart, Price versus BV, shows the price/share plotted against the BV/share. Note the high r^2. The fourth chart shows the ratio of the price to the trendline of the P versus BV curve. While the fit of price versus BV is very good over the long term, there are significant excursions from the trendline in the short term, notably in 1975 (below trend), 1999 (above trend), 2000 (below trend), 2007 (above trend), 2009 (below trend) and 2020(below trend). As of Dcc 31, 2024 the stock price was on trend at a stock price of $681K, a P/B of 1.51 and a price/(P vs BV trendline) of 0.97.
https://docs.google.com/document/d/1ed5MS6b_vz3d0o... I argue that the trendline of P versus BV can be used as a reasonable estimate of IV. The trendline corresponds currently to 1.56x BV. As an etimate of IV this value matches pretty well with Berkshire's repurchases. Berkshire repurchased shares in March '24 at 1.567x ending BV and issued shares in Sept '24 at 1.565x ending BV.
Comments appreciated.
rrr12345
