No. of Recommendations: 0
Whenever I mention P/B, I should add my caveat: I actually value the firm in a quite different way, based much more on earning power. But, almost entirely by coincidence, P/B has so far continued to give almost the same results. It makes a nice short hand that everybody can relate to. <i/>
While that may be true for how you estimate intrinsic value, you also make adjustments to intrinsic value that should not be reflected in a marked to market view of share price. Apple holdings, for example, get discounted in your estimate, but often end up being (on a market price basis) more of a % of total BRK value than would make sense.
I have to admit I have been lamenting some of the recent earnings performance as well. But I have been thinking they are a result of exposure to some of the more unique environmental circumstances of the recent era rather than long term structural declines in the business. So will be looking for how those hold up in the annual report.
