Mostly self explanatory
https://www.stonewellfunds.com/BerkshireValuation_...

The reddish dot at top right is Friday's closing price. The relationship of price to the red line level has historically been the best price predictor. Prices can do anything, but there doesn't seem to be any particular reason to expect the market price to rise in the next year.

Perhaps the most noteworthy thing I've noticed from my periodic valuation exercises is that my method concludes that intrinsic value has risen noticeably more slowly than book per share in the last decade. This implies that the true "fair value" P/B ratio is falling a little, not rising. Note that, other things being equal, buybacks would increase the "fair" P/B ratio as they depress book a bit.
Consider:
Real book per share is up inflation + 8.93%/year in the last 10 years
My value metric is up inflation + 7.15%/year in the same stretch.

The relative pessimism of my valuation metric is a function of two things. By far the biggest factor is that the subsidiary earnings have been pretty poor for quite a while, only now starting to rise again. Only with hindsight to we now realize that the rail earnings were unsustainably high for a while...current rolling four quarters earnings are 3.9% below their peak and have risen only 1.7%/year in the last 7 years. Still down 16% from FY 2019 in real terms. Similarly, real earnings in manufacturing/service/retailing are 6.6% lower than they were three years ago.

The other, smaller issue is that I do a partial cyclical adjustment on the equity portfolio. It's mostly market value, but richly valued equity positions are capped to 21 times "current but optimistic" earnings to allow for the possibility of a bit of transient froth in prices. Berkshire's equity portfolio has higher weighted average valuation levels based on earnings than it used to have, so this has a bit more of an effect than it used to.

My "two and a half column" valuation method is pretty simple:
* Investments per share valued at market value, sometimes reduced by the small cyclical valuation adjustment mentioned above
* Subtract 30% of float, on the assumption that the investment portfolio is worth a bit less than an unconstrained portfolio the same size would be because there will always be some extra cash with effectively zero real return
* Add a multiple of the trailing-year four "steady things" operating subsidiary earnings: Rails, utilities, MS&R, and a cyclically adjusted proxy for typical underwriting profits based on the scale of float and premiums earned

Overall, my real adjusted investments per share have risen inflation + 6.5%/year in the last 7 years, but total "steady things" real operating earnings per share only inflation + 3.8%/year. Overall my valuation metric has risen inflation + 5.47%/year in the same time frame. Historically speaking, usually the numbers aren't that low unless the end date is around a bear market.

Jim