I updated my valuation models.

Executive summary:
Value is made up of [adjusted] investments per share and [adjusted] operating earnings after tax. The third column is the rate of change of the total value per share.
All figures after inflation.

          Real Inv    Real Op    Real IV
1y roc       15.9%       3.8%      11.6%/year
2y roc       10.6%       0.9%       6.9%
5y roc        7.1%       4.6%       6.2%

From today's price, it would take a 16.5-18.5% drop to get back to average valuation since the credit crunch, depending on valuation metric used.

Interestingly, this slow patch follows a fast patch: today's log real IV estimate is almost smack on the long run trend since 2001 (within 1.5%). The slope of that fit is inflation+8.0%/year.

Imagining 3% inflation and pretty typical growth in observable value per share of inflation+7.5%, and a typical post-crunch valuation multiple at the end, you might expect to see a nominal price of $432-$449 per B share a year from now, again depending on the valuation metric used. Plus or minus a whole lot of course, depending on the randomness of overvaluation and undervaluation.

Needless to say, that would not be a great year starting from today's $478.74.

Obviously there is no law of nature that says the future valuation multiples will resemble what has been typical since 2008. But, per the table at the top, observable value growth per share hasn't been amazing for a while now, so there is no obvious reason for Mr Market to get fired up by Berkshire. The price has done well lately, but for the last three years that is simply Berkshire's price tracking an exuberant S&P 500 one for one. There is no evidence that the market likes Berkshire more than anything else, nor (lately) any obvious reason for it to do so.

Jim