Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd


The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
Answer this questionContinue to Shrewd'mThis note won't appear again
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
Unthreaded | Threaded | Whole Thread (5) |
Author: mungofitch ✹✺🐝 SILVER
SHREWD
  😊 😞

Number: of 22353 
Subject: Re: brk and fair value,
Date: 02/12/24 11:39 AM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 14
How many of us here think BRK is somewhat undervalued at current levels? I was thinking it’s not cheap at these levels, and I recently sold a bit for living expenses, but I’m often wrong!

I think it comes down to a firm distinction between price and value.

It seems the current valuation level is a fair bit above the average in the last 15 years. Consequently, if valuation multiples hover around the same range in the next few years, the short term outlook for the price is not that great. Emphasis on "if" and "short term", but I don't see any reason to have a central expectation of a positive real price return in the next year.

But I think the actual fair value is a fair bit above the average observed market value. It's entirely possible for the stock to be trading at a price that is both above average valuation but below actual fair value.

To me, fair value for any financial asset is what will get me Siegel's constant: around inflation plus 6.5%/year without relying on an exit point at an above-average valuation level.
Berkshire has mostly returned a fair bit more than that without getting more expensive, so it has mostly been underpriced. By extension, the *average* price is a lot less than the *fair* price.

Jim
Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to mungofitch here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
Unthreaded | Threaded | Whole Thread (5) |


Announcements
Berkshire Hathaway FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community