No. of Recommendations: 6
Another factor in this could be if Warren’s estimate of intrinsic value has grown faster than book value in recent quarters, so that price paid to estimated IV has increased less than price paid to BV.
Two factors that would support this :
1. Continuing buybacks over book value (small impact but directionally has this effect)
2. Warren might view the earnings in the large operating businesses plus GEICO as having been below trend recently and the current issues to be transitory. E.g. rightsizing the cost base in the railroad, legal charges taken in the energy division, IT legacy systems at GEICO.
