No. of Recommendations: 24
“Buffett aint doing nothin' to juice the stock.”
Obviously that was a joke. Everyone got that, right?
Remind us how long have you been reading and posting on the boards and how long do you own brkb? Thanks.You asked for it:
I first bought two B shares on 1/5/1999 at $2330/share. By 1/22/99 they were $2050/share and I bought two more. This pattern continued through 1999 and early 2000. Cheapest were two at $1450 and three at $1453 in February 2000.
I soon leaned those first shares were way overpriced. Currently 9.2% CAGR. Those much cheaper ones are at 11.7% CAGR.
I figured out how better to place a value on Berkshire (“intrinsic value”) and from then on only ever bought when it seemed quite cheap, and I had money, obviously. I bought some through the 2000's, a lot in 2008 and 2009. The best of those 2009 shares are at 15.3% CAGR.
You get the pattern.
I think my first post on The Motley Fool was about Berkshire book value and Buffett’s comments on share price, possibly including his “offer” to buyback at $45k in the 1999 annual letter. Probably in early 2000. The post was a continuation of work Benkea had posted on the Yahoo board. I didn’t post much on Yahoo. I had no idea what I was doing. I did used to read most everything Benkea wrote, and Iluvbabyb, Russ??, Eurotrash and some others. Some are no longer with us.
There used to be a way to search old TMF posts. The link is now broken. Don’t know if the posts are still out there. In some way I hope not, because I documented my excruciating religious deconstruction on TMF. No one wants to read that. Or my early investing mistakes. Berkshire was the one thing I did right.
That 1999 letter:
https://www.berkshirehathaway.com/letters/final199...Excerpts: Buffett:
Recently, a number of shareholders have suggested to us that Berkshire repurchase its shares. Usually the requests were rationally based, but a few leaned on spurious logic.
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You should be aware that, at certain times in the past, I have erred in not making repurchases. My appraisal of Berkshire’s value was then too conservative or I was too enthused about some alternative use of funds.
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Some of the letters we’ve received clearly imply that the writer is unconcerned about intrinsic value considerations but instead wants us to trumpet an intention to repurchase so that the stock will rise (or quit going down). If the writer wants to sell tomorrow, his thinking makes sense — for him! — but if he intends to hold, he should instead hope the stock falls and trades in enough volume for us to buy a lot of it. That’s the only way a repurchase program can have any real benefit for a continuing shareholder.
We will not repurchase shares unless we believe Berkshire stock is selling well below intrinsic value, conservatively calculated. Nor will we attempt to talk the stock up or down. (Neither publicly or privately have I ever told anyone to buy or sell Berkshire shares.) Instead we will give all shareholders — and potential shareholders — the same valuation-related information we would wish to have if our positions were reversed.
Recently, when the A shares fell below $45,000, we considered making repurchases.
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Please be clear about one point: We will never make purchases with the intention of stemming a decline in Berkshire’s price. Rather we will make them if and when we believe that they represent an attractive use of the Company’s money. At best, repurchases are likely to have only a very minor effect on the future rate of gain in our stock’s intrinsic value.
They never did buy any. The stock price quickly went up. Buffett is reported to have said later: "now that was a sign!"
$45k would have been 1.18x 1999 year end book value.
If you asked Buffett today, do you think his answer will be any different? He will never try to support the stock price. I hope Abel is the same.
