Berkshire Hathaway - thoughts?

aroominyork

	1 year	3 years	5 years	10 years
Berkshire Hathaway	20%	52%	99%	408%
North America	6%	45%	80%	280%
Global	-1%	32%	54%	175%

47% in Apple and most of the rest in Bank of America, Coca-Cola, American Express and Kraft Heinz is conviction investing on steroids, but they seem to know what they are doing.

MX5huggy

Run by a 91 year old who’s deputy is 98. Seems likely there may be change at the top soon.
I’m happy with 0.6% of my ISA in BH. 

aroominyork

MX5huggy said:

I’m happy with 0.6% of my ISA in BH. 

Just one of the Class A shares, then?

MX5huggy

aroominyork said:

MX5huggy said:

I’m happy with 0.6% of my ISA in BH. 

Just one of the Class A shares, then?

No 2 (I wish). 

tebbins

It's an awkward company to evaluate but I hold it anyway.
Re: the investment portfolio, according to https://www.cnbc.com/berkshire-hathaway-portfolio/ this comes to around $330bn, out of a $730bn mkt cap as at the time of writing, so the $140bn Apple stake is less than 20% of the market cap. According to their form 10-K on page K-40, there is a further $110bn of cash, bonds and other, so the "portfolio" part of Berkshire counts for $440bn on the balance sheet and theoretically should also count for $440bn of the market cap.
Berkshires book value was $515bn, implying the book value of the operating subsidiaries should be around $75bn, and the implied enterprise value around $290bn.
However really you should be using form 10-Q for Q1 2022 when it comes out, since I've used figures dated 31/21/2021 with live figures, so this isn't accurate.
I'm happy to hold Berkshire, partly because "I like and trust the company" and partly as a counter to all the hype and nonsense and fraud and speculation that goes on in the US. I believe in the philosophy that if you focus on doing business well, results will follow, as opposed to the obsession in many businesses of chasing results and neglecting your operations.

george4064

With a 1.7% weighting in the S&P 500, virtually anyone with a pension will have some exposure to Berkshire Hathaway.

aroominyork

tebbins said:

It's an awkward company to evaluate but I hold it anyway.
Re: the investment portfolio, according to https://www.cnbc.com/berkshire-hathaway-portfolio/ this comes to around $330bn, out of a $730bn mkt cap as at the time of writing, so the $140bn Apple stake is less than 20% of the market cap. According to their form 10-K on page K-40, there is a further $110bn of cash, bonds and other, so the "portfolio" part of Berkshire counts for $440bn on the balance sheet and theoretically should also count for $440bn of the market cap.
Berkshires book value was $515bn, implying the book value of the operating subsidiaries should be around $75bn, and the implied enterprise value around $290bn.
However really you should be using form 10-Q for Q1 2022 when it comes out, since I've used figures dated 31/21/2021 with live figures, so this isn't accurate.
I'm happy to hold Berkshire, partly because "I like and trust the company" and partly as a counter to all the hype and nonsense and fraud and speculation that goes on in the US. I believe in the philosophy that if you focus on doing business well, results will follow, as opposed to the obsession in many businesses of chasing results and neglecting your operations.

If market cap is $730bn and the balance sheet shows $440bn of assets, does that mean shares are trading at a 66% premium to net asset value?

Thrugelmir

MX5huggy said:

Run by a 91 year old who’s deputy is 98. Seems likely there may be change at the top soon.

Already just figure heads........

tebbins

aroominyork said:

tebbins said:

It's an awkward company to evaluate but I hold it anyway.
Re: the investment portfolio, according to https://www.cnbc.com/berkshire-hathaway-portfolio/ this comes to around $330bn, out of a $730bn mkt cap as at the time of writing, so the $140bn Apple stake is less than 20% of the market cap. According to their form 10-K on page K-40, there is a further $110bn of cash, bonds and other, so the "portfolio" part of Berkshire counts for $440bn on the balance sheet and theoretically should also count for $440bn of the market cap.
Berkshires book value was $515bn, implying the book value of the operating subsidiaries should be around $75bn, and the implied enterprise value around $290bn.
However really you should be using form 10-Q for Q1 2022 when it comes out, since I've used figures dated 31/21/2021 with live figures, so this isn't accurate.
I'm happy to hold Berkshire, partly because "I like and trust the company" and partly as a counter to all the hype and nonsense and fraud and speculation that goes on in the US. I believe in the philosophy that if you focus on doing business well, results will follow, as opposed to the obsession in many businesses of chasing results and neglecting your operations.

If market cap is $730bn and the balance sheet shows $440bn of assets, does that mean shares are trading at a 66% premium to net asset value?

The balance sheet as of 31/12/2021 shows a net book value of $515bn, of which $446bn was cash and investments held within the insurance business (including $4.3bn "other"). It's not so much an investment trust held at a premium or discount, as it is an investment trust that also holds a conglomerate of operating subsidiaries, which it would appear are implicitly valued at roughly (730-446) / (515-446) = 4x book value, in line with the S&P500 average of 4.3 according to the portfolio data page for VUSA.
However this mixes up figures dated now and dated 31/21/2021 and the balance sheet is more complicated than that so this is probably a ways off accurate.

sebtomato

aroominyork said:

	1 year	3 years	5 years	10 years
Berkshire Hathaway	20%	52%	99%	408%
North America	6%	45%	80%	280%
Global	-1%	32%	54%	175%

47% in Apple and most of the rest in Bank of America, Coca-Cola, American Express and Kraft Heinz is conviction investing on steroids, but they seem to know what they are doing.

Warren Buffet has advised people to get an S&P500 tracker instead of Berkshire Hathaway shares, so his confidence that the good past performance will be repeated in the future is low.

eskbanker

sebtomato said:

Warren Buffet has advised people to get an S&P500 tracker instead of Berkshire Hathaway shares, so his confidence that the good past performance will be repeated in the future is low.

At the risk of reopening the can of worms that this often becomes, his point was about the merits of diversification rather than it being an assessment of his company's prospects as such....