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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: AdrianC ⎊✹  😊 😞
Number: of 21944 
Subject: Re: Say it isn’t So
Date: 11/04/25 9:39 AM
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Repurchasing shares is inappropriate when the shares are trading comfortably above intrinsic value (which I still think they are). And I think those two things are what lead people to say, "Let's continue to wait, and continue to retain our earnings/cash." But at some point, this can't be the answer - that's why Berkshire's Owners' Manual has the retained earnings test.

I agree the shares are trading somewhat above intrinsic value, perhaps a minority opinion here? That won't always be the case. Who would have thought the market would allow Berkshire to buy back nearly $80B already? It will happen again.

Has Berkshire been passing the revised retained earnings test? And does it even make sense, now that book value is losing its relevence?

newsletter.rationalwalk.com - Berkshire hathaways retained earnings

The revised retained earnings test requires two conditions to be true:

Berkshire’s increase in book value must exceed the performance of the S&P 500 on a five year rolling basis. Although not explicitly stated, I would interpret this to mean book value on a per share basis.

Berkshire’s stock must consistently sell at a premium to book value.
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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