“So You Bought $1,000 Of Berkshire, Hathaway Stock: What Did You Get?“

It's an interesting question.
This is his answer:
$317 in equities
$292 in cash and cash equivalents
$391 implied market value of all other assets (39.1% of his total)

But unfortunately his answer is totally wrong. Not just because he chose a rather meaningless scaling factor, but mainly because he forgot there are liabilities.

If you buy $1000 worth of Berkshire at the current price of $669225 (all other figures using June 30 breakdown), you get ownership of $626 worth of net assets. P/B is 1.598 right now.
That $698 in net assets is made up of $1153 in total assets, minus $527 in liabilities.

The $1153 of total assets that you get for your $1000 breaks down as follows:
$327 in equities
$288 in cash and cash equivalents
$538 implied market value for all other assets (46.7% of the total assets you've purchased, and 53.8% of the $1000 you invested)

Jim

Berkshire Hathaway FAQ

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