Mark19, BRK is not a typical business which means you need to be a little more careful with applying a single valuation metric. The good news is that the business is VERY predictable and has traded in a valuation band that has been "reverse engineered" by many on this board including Mungo and he has shared a lot of detail behind it (what he calls this 2.5 column method)

Here is a summary of the "Grove Method" (BRK is a collection of different business types and other holdings) - if you really want to understand BRK this is a very good exercise to do at least once.

Grove:1 Non-Insurance Operating Businesses Earnings
Grove:2 Equity Investments less Taxes
Grove:3 Partially Owned Businesses Earnings
Grove:4 Cash & Fixed Income
Grove:5 Insurance Profits

The absolute easiest (and surprisingly accurate) is to use Price to Book. In general 1.4x is expensive 1.3 is cheap.

tecmo
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Berkshire Hathaway FAQ

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