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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: EVBigMacMeal 🐝🐝  😊 😞
Number: of 21944 
Subject: Re: New post from Brooklyn investor
Date: 02/16/26 11:41 AM
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Has anyone calculated the compounded annual return for Berkshire from here under the following cannibal conditions?

Exit at a Price to Book value at the current market ratio in year 5. A reasonable valuation.

All excess capital, defined as cash in excess of insurance float, plus annual free cashflow deployed into share buybacks over a period of 5 years at 1.4 price to book ratio (or whatever management considers an intelligent discount to intrinsic value.) would require a bit of luck but and intelligent capital allocation but not a lot.

No major acquisitions, or equity investments.

Maintenance capex only.

Existing businesses grow at the level of the US economy. Not a huge hurdle.

Equity investments grow in market value in line with the US economy. Again not a huge hurdle.

My unreliable AI assistant tells me it would be around 9% CAGR. That seems a bit high intuitively.

Although, in this scenario the buy backs at even a small discount probably add up to something significant.

5 years of FCF plus current excess cash would dramatically increase remaining shareholder slice of the pizza.

Given the foundation selling pressure; loss of Buffett and Munger magic narrative; tax efficiency; general market valuation risk; harder and for Greg Abel to remain over capitalised versus Buffett and perhaps rational - it does sound like a reasonable base probability outcome.

What’s your 5 year CAGR in this cannibal scenario?
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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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