In addition to the historic step change in BRK’s valuation in 1998…

… the year 2018 saw another momentous event in the price discovery scheme. That is when Buffett announced the “I’ll buy when I feel like it’s a good value” regime. It replaced the 1.1x and later 1.2x BV regime. That was in place for 6 years and the market never offered them a chance to buy any share; the bump up to 1.2x happened to accommodate the single private transaction with the Ueltschi estate. To underline the regime change to “watch us”, Buffett simultaneously dropped reporting the BV multiple column in the Letter.

The upshot of this regime change in 2018 was that Mr. Market had to look in the mirror to see “what they bought”. And of course Berkshire being able to buy $70 Billion and counting since.

For me, nothing underscored the regime change more than Greg Warren’s repeated questions to Buffett on the buyback mechanism; one prominent one was “Do you use the yet-to-be-announced intra-quarter book value to buyback?”. Besides the oxymoronic nature of that question (Berkshire doesn’t waste time or energy on such financial gimmickry), Buffett said “no” to Gregg but that didn’t stop him reporting that Buffett confirmed that they did. No matter what he or Mr. Market thinks, this was a master stroke from Buffett.

So, we’ll wait until November 15 to see “what they did”.