"I have a real 5-year IV growth (5-groves) of 4.8% CAGR."

I am getting book value increase of 11.5% CAGR for the last 5-years. ChatGPT tells me that the average inflation in the last 5 years has been 4.5%. Hence, the real increase in book value was likely around 7%.

What might explain this discrepancy?

Since the firm also bought back stock during the last 5 years, I would have expected the increase in book value to trail increase in IV. But here, we have the opposite. While, as Jim has noted, relatively modest buybacks (relative to Berkshire’s size) shouldn’t create a large short-term divergence between book value and IV growth, the gap here still seems notable.

Separately, if real IV growth has indeed been only ~4.8% annually over the past five years, does a price-to-book multiple of 1.5–1.6x seem justified? Berkshire has repurchased shares at levels just below ~1.5x book, which implies that management views intrinsic value as at least 1.5–1.6x book (given their mandate to buy back stock only below their conservatively calculated estimates of IV).