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BRK/B closed at $485.68
SPY closed at $614.91

Interestingly, only a couple of months ago they were the very same price. They criss-crossed on a number of days in the first three weeks of April.

Berkshire's entire relative-to-market rally, roughly third week Feb to third week April, has now unwound. Back on the longer term market tracking trend, for the moment.

Jim

The stock price has fallen pretty steadily since the annual meeting. I think the major reasons are the announced retirement of WEB as CEO and the reduced valuation of BHE.

I think the major reasons are the announced retirement of WEB as CEO and the reduced valuation of BHE.

The reduced valuation of BHE has been known for sometime now; ever since BRK bought out the minority stake of Walter Scott Estate in 2024. So it's hard to imagine it was a new revelation for shareholders during the annual meeting in May.

Even Warren's retirement is not a complete surprise. We have known at least since 2018 that this is going to happen at some point. Perhaps the precise timing is a small surprise, i.e., the way it happened at the 2025 AM.

So it is very hard to attribute the recent correction in BRK stock price to either event. My guess is that BRK appeared to be a safe harbor during the tariff & geopolitical uncertainty during March & April when the markets were in risk off mode. They appear to be back in the risk on mode since May with the TACO thesis, which likely negatively affected BRK stock price.

Just my 2c.

"The reduced valuation of BHE has been known for sometime now; ever since BRK bought out the minority stake of Walter Scott Estate in 2024. So it's hard to imagine it was a new revelation for shareholders during the annual meeting in May."

It's one thing to infer that the value declined based on the price paid to the Scott family, but it's another thing for Buffett explicitly to say that the value declined. Some analysts, like Greg Warren, are still valuing BHE at $87 billion, based on the price paid to Greg Abel, not $49 Billion based on the price paid to the Scott family. A $38 billion decline in value, if that is the correct inference, is a big deal.

If BHE were publicly traded with a market cap of $49 billion I would be buying it hand over fist. What WEB said publicly about the valuation being lower should be viewed with skepticism. Remember when BRK bought BNSF and WEB said publicly how they had to overpay for it. And if you ask a question at the meeting about the valuation of one of BRK's holdings the response is, "We're not in the business of giving away free information."

It got ahead of itself and now it is reverting back. Mr. Market’s tastes evolve from time to time. Awaiting the time when repurchases happen and then I can look to add, if it makes sense considering my cash levels.

This is an informative graph
https://stockcharts.com/h-sc/ui?s=BRK%2FB%3ASPY&p=...

The ratio of Berkshire's price to the S&P total return for the last year. A horizontal line would be perfect market tracking, a rising line is Berkshire outperforming.

It's almost enough to make you think that stock prices follow the "what goes up must come down" rule, though of course some things go into orbit.

Jim


PS

Speaking of heading into orbit---

https://finance.yahoo.com/news/irrational-exuberan...

(Bloomberg) -- Wall Street speculators have returned in full force: US stocks have snapped back from the throes of April’s tariff selloff, hovering near record highs, the pipeline of new SPACs is rebounding and Cathie Wood’s flagship fund is on a historic tear.

That’s sparked a swift jump in a Barclays Plc measure of the market’s “irrational exuberance” — a phrase coined by former Federal Reserve Chair Alan Greenspan for when prices exceed assets’ fundamental values. The one-month average on the proprietary gauge has swung back into the double-digits for the first time since February — reaching levels that have signaled extreme frothiness in the past.

The bank noted that the measure, which is calculated from derivatives metrics, volatility technicals and sentiment signals inferred from options markets, has historically averaged around 7%, but occasionally it peaks above 10% as during the Dotcom era of the late 1990s, and the meme-stock frenzy of 2021. The gauge currently sits around 10.7%, data compiled by Barclays show.

“Fundamentals have taken a back seat again as stocks with hot narratives are trading like lottery tickets,” said Dave Mazza, chief executive officer of Roundhill Investments. He points out sentiment gauges like relative strength readings and valuation multiples are once again looking extended. “That sets the stage for a sharp air-pocket on the next bad headline.”

Animal spirits have been revived on optimism that the US is making progress on reaching trade deals with key partners — or that President Donald Trump will at least postpone his July 9 tariff deadline. There’s also speculation the Federal Reserve will cut interest rates. The upshot is that stocks set a record high on Friday for the first time since February.

Barclays sees abundant signs of froth, with listings of new blank-check companies in 2025 already surpassing the last two years combined. Meanwhile, Cathie Wood’s ARK Innovation ETF (ARKK) — a proxy for profitless technology firms — posted one of its best rallies in history, second only to the post-Covid surge.

In the second quarter, Bitcoin-linked firms rallied 78%, while quantum computing shares climbed 69% and meme stocks advanced 44% ...

BRK's 2025 YTD return now trails that of the S&P 500 index. Amazing reversal since May.

Of course those of us long term holders would like the stock lower which will allow repurchases. I’m thinking somewhere around 450 may get a trickle of cash to flow in from headquarters

General weakness in markets & financial conditions would be better for BRK holders. It gives a chance for Warren & Greg to put that large stash to work.

General weakness in markets & financial conditions would be better for BRK holders. It gives a chance for Warren & Greg to put that large stash to work.

Indeed. No matter how hard it would be emotionally, the best thing for the value of a share of Berkshire would be a deep decade-long deep bear market like the early 1980s.

Sometimes you have to be careful what you wish for, as this would likely affect the price of Berkshire shares as well, despite being good for value growth. I found the stretch of precisely zero real price change from 2007-12-10 to 2013-05-07 (5.41 years) sufficiently trying. I remember much gritting of teeth.

Jim

I would love to hear at what point people here currently would buy Berkshire, would not sell puts or whatever, but simply would buy good oldfashioned shares with a really BIG part of their portfolio --- especially those who did the I think reasonable thing and sold heavily at $500+.

People like Jim (ok, he clearly stated that: Never, as it's US), nola, Gator, Mark, DTB, the two LongtermBrk´s, Texirish etc. etc. Maybe one or the other is willing to say?


(P.S.: I don't compare myself to those posters I respect very much, but for what it's worth at current BV I would only start at $450 to accumulate again.)

Have orders in at 400 & 380. Sold a chunk at 526 . Last big purchase was in the 161-179 area during covid. Havn't bought an A shares in decades.

I would buy more at around 1.4x BV

Unfortunately, I think we will see a protracted period of weakness with the transition to Gregg.

“ BRK's 2025 YTD return now trails that of the S&P 500 index. Amazing reversal since May.“ Did anyone here suggest long spy short brkb was the correct trade in January? Did anyone suggest that Buffett should expedite his gifting so that the foundations could sell billions into 525 brkb,6 weeks ago? I’m such a bad partner, off to the park, later folks.

I agree with longtimebrk...the last time repurchases were in gear one had the opportunity to buy below Berkshire and that is my game plan again

I would love to hear at what point people here currently would buy Berkshire, would not sell puts or whatever, but simply would buy good oldfashioned shares with a really BIG part of their portfolio --- especially those who did the I think reasonable thing and sold heavily at $500+.

...for what it's worth at current BV I would only start at $450 to accumulate again


That price sounds about right to me.

To be honest, I am not very excited about Berkshire, and I wouldn't make it a big holding. I sold around $425 in February 2024, expecting to be able to buy back substantially lower. A year and a half later, the value has moved up by, say, 10%, so today's $485 is not very much higher with respect to value than it was when I sold.

I think its fully owned businesses will do fine, with Abel as a competent operator, and I expect they will invest capital carefully as they always have, with a small amount of leverage from float, and deliver market-beating returns, but I don't expect anything very dramatic, largely because they have become too big to move the needle with small equity purchases and anything they might want to buy is so expensive right now.

$450 seems like a fair price to have a 5% position, and I have recently sold June 2026 puts at exactly that price, for the equivalent of about a 3% stake, so I would love a little drop to, $425, my breakeven price, and I would then buy regular shares to increase that. If that happens, say in 6 months, I will be out and in at about the same price, and Ii have so far done quite well with the funds freed up at that same price 2 years prior, so no regrets. And I might pull the trigger a bit sooner, because it doesn't feel right not to be an owner of this business...

BRK's 2025 YTD return now trails that of the S&P 500 index. Amazing reversal since May.

This is an interesting variation of the chart: BRK/B and SPY plotted at their own absolute prices.
https://stockcharts.com/sc3/ui/?s=BRK%2FB&p=D&yr=1...

Seen this way, it seems to be a big risk on / risk off thing going on year to date, with SPY on a roll with risk on, and BRK on a roll with risk off. The central panic-and-bounce part of April seems to be the only bit with a positive correlation.

So much for the myth that super large caps in the S&P 500 are all just index trackers these days. At least, not yet.

Jim

I propose that within a year of Warren passing, a large dividend will be passed for BRK.

Right now it would be too costly from a tax position for Buffet to stomach.

When Warren exits I suspect strong buybacks assuming stock weakness. Want that vs a dividend

I never agreed with Warren that the stock will go up on his passing. But he a way smarter than me.

Right now it would be too costly from a tax position for Buffet to stomach.

Not correct. Buffett at this stage is agnostic to a dividend because he could just donate the dividend proceeds in cash to charities and get a 100% tax deduction for the cash donation. So it's a wash for him.

But it is very painful for long term shareholders of BRK stock like many of us on this board with very low cost basis. We & they don't want to suffer the tax consequences of a dividend. As Buffett explained to us, they could just manufacture their own dividend when they need cash by selling a portion of their stock & by paying tax only on the capital gains as opposed to the entire proceeds of a dividend.

< i> he could just donate the dividend proceeds in cash to charities and get a 100% tax deduction for the cash donation. So it's a wash for him.

Not quite 100% tax deduction for charitable contributions. There is a cap of 60% of AGI (and in some circumstances lower) on cash contributions to public charities. So it would depend on what percentage of his AGI would be dividends.

People who wish for a dividend from BRK should never have invested in BRK. It doesn't pay a dividend and -- hopefully, most likely -- never will. The last time it came up for a vote, the results were clear: NO DIVIDEND.

If you're interested in circles, don't buy a square.

SD

If you're interested in circles, don't buy a square.

And in particular, if you DO buy a square, don't keep asking for rounding the corners.

Dividends are like hats. The company can let its stock go up in price. You can sell some, and buy a hat you like, cheap or expensive or none at all. Or the company can pick a single hat that they think will suit every shareholder, and mail the same hat to everybody whether they want it or not, without any consideration of the fit or cost.

Dividends are either too big or too small an amount for almost everybody.

Jim

There is a cap of 60% of AGI (and in some circumstances lower) on cash contributions to public charities.

You are correct. IRS allowed 100% deduction only for tax years 2020 & 2021 to encourage donations during the pandemic and it has since expired. Anyhow Warren is probably not concerned about tax deductibility at this stage (he is not even using the write off from his stock donations) but probably just wants to make sure the charities get 100% of monetary value of his donations.

People who wish for a dividend from BRK should never have invested in BRK. It doesn't pay a dividend and -- hopefully, most likely -- never will. The last time it came up for a vote, the results were clear: NO DIVIDEND.

If you're interested in circles, don't buy a square.

💯

If at some point the board of directors of Berkshire declares a dividend some day in the future (and I hope that day never comes), it would be a sad day indeed for shareholders. It means that the management is admitting defeat in retaining 100% of earnings & reinvesting them at attractive rates of return for shareholders' benefit. Those who are clamoring for a dividend better hope they don't get what they want. It will surely reduce the compounding growth rate at Berkshire.

In the meantime, I hope Greg & Warren just buyback stock whenever it is the best use of resources while waiting for a juicy opportunity to do something big & meaningful (acquisitions or equity purchases in the open market) that can move the needle at Berkshire. The other advantage of buybacks is that they can be turned on or off as the price/value equation and alternate uses for cash change.

The way that the dividend proposal was worded was absolutely idiotic. In all fairness another one should be done. HC?

Regardless of who were to write it currently there is no way it would receive anything close to 50% but I would bet dollars to doughnuts that it receives more support than the previous one did.

People who wish for a dividend from BRK should never have invested in BRK. It doesn't pay a dividend and -- hopefully, most likely -- never will. The last time it came up for a vote, the results were clear: NO DIVIDEND.

You obviously don’t know how dumb they are! I used to chime in on this board but they’re too stupid to bother.

I don't believe that is true. Only 60% of AGI can be impacted by cash donations.

Dividends, stock buybacks, and equity purchases are not mutually exclusive events.

All 3 can be pursued.

Only 1 of those is available in all market conditions. Dividends.


I have plenty of low cost BRK share. I would guess more than many on this board, even after selling a third earlier this year. But a 1% or slightly more dividend still makes sense to me. Too much cash is sitting idle at low rates for me.

To simplify.

BRK has $40 BB of operating earnings.

Pay $10 BB in a dividend. Costco style. Small quarterly and large annual.
Buy $10 BB+ in equities, market conditions?. Could be $50 BB+?
Buy all the BRK stock you can, market conditions?. (Likely never more than $10 BB per year?)

It is plausible that we may never go below $200 BB in cash without a dividend in the next 10 years. This is a scenario that I do not desire.

" And in particular, if you DO buy a square, don't keep asking for rounding the corners.

Dividends are like hats. The company can let its stock go up in price. You can sell some, and buy a hat you like, cheap or expensive or none at all. Or the company can pick a single hat that they think will suit every shareholder, and mail the same hat to everybody whether they want it or not, without any consideration of the fit or cost.

Dividends are either too big or too small an amount for almost everybody.

Jim"


Good morning old bud, with all due respect you can sure be stubborn. 20 years ago I politely asked a Ken Fisher salesmen to leave my home after he told me I was way overweight brka and it wasn't prudent. I may have been 40-50 % brka back then, zero bonds. You don't recall me predicting Buffett would be FORCED to make, shareholder friendly moves, to get the common above 1.2 xs BV? The day he finally announced the authorized buyback for the first time in my brkville history many fellow posters congratulated me on my call. My old pal Hbird was around back then I'm sure she can remind you along with a dozen old timers. Loading up on brka common PRIOR to the buyback knowing that move would goose the stock 10 percent proves I was, " rounding the corners"? Do you think it was a mistake to authorize the buyback? He used the 1.1 xs BV limit because he still had no interest in buying back the stock, he just wanted to sell his shares via the foundations above 1.1 xs BV, still way too cheap. For some unexplained reason he was willing to sell his life's work way too cheap, I'll never understand why?

With respect to a very small dividend. I'm shocked a foreigner who has been in the business for many decades doesn't know that many investors, funds, institutions, etc around the globe WILL NOT or CAN NOT buy non div paying stocks. Are you saying this is untrue? IF I'm wrong about a very small div increasing demand for the common, please explain WHY nvda, gool, meta, apple etc pay a very small div? Is this some type of concession that their best growth days are over? IF that is the case, how do you explain their current PEs? WHO has this wrong, the market or you?

BTW, isn't it nice that on this board we can have a civil debate without you having to warn me that the message board goons and bullies are going to have me excommunicated from the church of brkville IF I continue to question whether Buffett has pitched a perfect game? Also, I'm on the computer with my glasses on, I think I need larger print, lol, getting old beats the alternative pal, sorry for any typos.

" People who wish for a dividend from BRK should never have invested in BRK. It doesn't pay a dividend and -- hopefully, most likely -- never will. The last time it came up for a vote, the results were clear: NO DIVIDEND.

You obviously don’t know how dumb they are! I used to chime in on this board but they’re too stupid to bother"

Oh my, another stock market guru heard from. I'm still interested in why you would claim jim is a liar before I ignore you. BTW, in general Jim doesn't like to get involved with this type of discussion, but IF he wishes to post that I'm lying and he never privately told me that , I won't be offended jim.

WARNING, obviously when I went to the local police and the FBI I made HARD COPIES of the posts and various other texts I received. I MIGHT still have THAT FILE, I wouldn't want to embarrass anyone.


In the late 80s, I worked with the FBI and the state of Nevada division of securities on certain financial scams that I helped bust, I knew the game and I knew where the Feds had to look to uncover the players. It was amazing to watch the power and reach of our FBI, no one tells the Feds we are busy, come back next month, trust me. That's why I was able to call the FBI and have an agent take my call, day one.

IF I'm wrong about a very small div increasing demand for the common...

If you think Buffett wanted to manipulate demand for Berkshire common, I'm not sure you understand the man as well as you think you do. You sometimes seem to have a low opinion of him. There are other reasons to institute a buyback at a specific price.

“ There are other reasons to institute a buyback at a specific price.” If you think Buffett finally authorized a buyback with a 1.1 xs BV limit because he was afraid he and munger would get reckless and out of control, you are entitled to your opinion.

But a 1% or slightly more dividend still makes sense to me. Too much cash is sitting idle at low rates for me.

Why don't you sell a little stock (now at roughly 1.5-1.6 times book value) then instead of asking management to force all shareholders to get the dividend whether they want it or not? BTW getting dividend is equivalent to selling a portion of the equity with zero cost basis at 1.0 times book value whether you realize it or not.

Dividends are like hats. The company can let its stock go up in price. You can sell some, and buy a hat you like, cheap or expensive or none at all. Or the company can pick a single hat that they think will suit every shareholder, and mail the same hat to everybody whether they want it or not, without any consideration of the fit or cost.

Well put.
Statements like this will get you stoned as a heretic on many thousands of internet boards & yahoo videos. But you surely know that. ;-)

There are so many articles and youtube videos talking about the glories of getting $XX dividends a month and retiring on Dividend income.

Thank goodness shrewdm doesn't have any "Dividend" boards like TMF had. I can't count the number of times I got roasted on the old TMF "Dividend Growth Investing". And now in the comment sections of youtube videos.

So many people truly implicitly believe that dividends are free money. Even when they say "I know dividends are not free money" their actions say that they do believe so.

Anyway, your above statement sums it up better than I have ever seen. Added to my quotes file. Thanks.

Dividends are like hats. The company can let its stock go up in price. You can sell some, and buy a hat you like, cheap or expensive or none at all. Or the company can pick a single hat that they think will suit every shareholder, and mail the same hat to everybody whether they want it or not, without any consideration of the fit or cost.
...
Well put.
Statements like this will get you stoned as a heretic on many thousands of internet boards & yahoo videos. But you surely know that. ;-)


Well, I did phrase it in a bit of an extreme way, so a pinch of disdain is not unwarranted. I will grudgingly admit that there's nothing wrong with a small dividend here or there, other than messing up my investment bookkeeping. I just have a problem with folks who don't quite get the pros and cons, both among management teams and among shareholders. Whose lifestyle does a small dividend change? A big one as percent of operations is well suited to a cash cow that can't expand. A big one as a percent of stock price is most often a bad sign...if it were a good company, the price would be bid up and the yield would be normal. A super high dividend never lasts. Either the firm is good but oversold and rebounds so the yield falls, or the dividend gets cut.

So the main reasons for a solid dividend are
* The business has no opportunities to deploy that slug of capital at decent rates of return, and management knows it. Nothing wrong with that, sometimes it's the best choice, and management is making an intelligent choice, which is a good sign. This is what See's does within Berkshire.
* They do have good opportunities, but management is dumb, so they think a dividend is a better idea because it's...conventional? Not sure what they're thinking.

The main reasons for a small/token dividend are:
* Management thinks that's what they're supposed to do, not really understanding capital allocation, similar to #2 above.
* Management knows it's not really useful, but they think a dividend will mysteriously make them more popular or taller. Like the Hitchhiker's Guide says, "mostly harmless" I guess.

None of the four situations is super attractive to me. Different strokes, I guess.

There are times that a portfolio with a decent yield makes sense, and I wrote about that recently. https://www.shrewdm.com/MB?pid=42332882
(the subtle thing in that post being that a suitable dividend portfolio with turnover will generally maintain its dollar value of income generation right through a bear market, or nearly so, unlike a buy-and-hold portfolio).
But it's a small niche.

The most rational dividend philosophy would, I admit, be very unpopular: if there are opportunities to deploy the capital, or such opportunities are expected to come around soon enough, sit on it. If there is still excess cash beyond foreseeable opportunities, check the stock valuation. If it's high, pay a dividend. If it's low, stop the dividend and do buybacks. Alternate as required. This would be received more favourably if every dividend during high stock prices were called "special".

Jim

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