No. of Recommendations: 13
If we define 'fair value' as the maximum price BRK itself is willing to pay for a share (admittedly against BRK statements that it only purchases at a discount to fair value), based upon P/Book, we're currently at or around fair value. ...
If you assume book as the valuation metric, today's adjusted price based on last reported book (or highest reported book to date) is $457.22 (1.567 * $291.72).
There is likely a distinction between buybacks for capital allocation purposes (in which case that conclusion is probably merited), and buybacks from the estates of shareholders (which seem to take place at a wider range of valuations, so no firm conclusion should be drawn).
We know that some of the buybacks this year were from estates, and there seems to be a strong consensus that some high-multiple ones were among them. One slight clue at least for long time shareholders is when the buybacks are all, or nearly all, in A shares.
I for one am pretty sure that Mr Buffett would not be a buyer, as an investment-type repurchase, at above 1.5 times book these days.
For whatever it's worth, there has been no buyback of a B share above $357.22 (average price paid per B in the month of the buyback), which was 15 months ago. That was 1.437 times known book at the time. There have been 3 months with B repurchases in the range 1.45-1.48 times peak-to-date known book at the start of the month in question. Unless my table missed something, 1.4796 times "peak to date" known book at start of the month of the buyback seems to be the absolute top ratio paid for a B share (again, average within the month--presumable a few shares a bit higher and lower). That "top price paid" valuation level would be $413.11 right now.
Of course, we're reading between the lines here. There is no demonstrably right or wrong answer.
Jim
