Subject: Re: BV?
What is Berkshire's book value per share expected to be as of Mar 31 and Jun 30? Thanks.
I haven't calculated it. But using a pretty typical extrapolation, and a conservative extrapolation, I'd get the following per B share:
Q Book? Price?
Mar 305-308 $458-463
Jun 310-316 $465-474
Sep 315-324 $472-486
Dec 320-332 $479-498
That is very crude: the range is based on nominal book growth rates of 6.1% (1.5%/quarter) or 10.4%/year (2.5%/quarter) from the most recent figure, and guessing that "normal" pricing is around 1.4 times book, the 15 year average. One could get a lot fancier, but I don't think it's worth the bother. Plugging in current stock market values is fun, but too much is changing too fast. About the best one can say is that this year may end up on the spectrum ranging from normal to below-normal for progress in real value per share.
One could also observe that, with the stock price at $529.50 as I type, to see a good year (or two) for the stock price will require something to happen which is both (a) unusual and (b) good.
Note that the table above is in nominal US dollars. Inflation and currency moves mean that the progress in actual purchasing power wealth will be different. FWIW, the trade weighted US dollar is down 8.2% year to date. To get a feel for the meaning, Berkshire's price is up 16.8% year to date measured in US dollars, but only 7.3% in purchasing power of goods and services which can be traded or compete internationally.
But back to nominal US dollar pricing---
Perhaps too much has been written here about writing calls against one's Berkshire portfolio, being too clever by half, but I note that people were paying $33.15 for September $535 calls yesterday. Ask me how I know...
Anyway, that might force you to sell your stock for net proceeds of $568.15, which compares not badly to the "business as usual" expectation figures in the table above. Or you get an extra return on whatever the stock price does in the next several months, an additional 6.25% or 14.8%/yr rate.
Jim