Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd


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.
Answer this questionContinue to Shrewd'mThis note won't appear again
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
Unthreaded | Threaded | Whole Thread (4) |
Author: ppant   😊 😞
Number: of 21944 
Subject: Re: Barrons Article on BRK
Date: 04/02/24 3:08 AM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 24
I found it useful to look at recent history to see how things panned out when the stock has been at similar levels.
I think the last time the stock at these sort of multiples to contemporaneous book value was in January 2018.
For a position established at that point, the 5 year CAGR was 7.5%. Not great but hardly terminal and the first and final years of that holding period co-incided with weak markets.
For holding periods of 6 years and above starting Jan 2018, the returns settled into the 10-12% range that the underlying business generates.

I personally have very little interest in predicting or playing yearly moves in stock price so a 5 year forward expected return is the way I tend to think of prospects.

If the next 5 years are similar and a 7.5%pa return for a 5 year hold is acceptable then there is no real reason to do anything. Obviously the decision is harder today when risk free US treasuries are offerring much higher returns than were in Jan 2018. The other factor is that the next five years will almost certainly see Buffett leaving the helm so there could be some volatility related to that.

Personally I am not doing anything with my Berkshire position. If the market throws up other opportunities, I'd be less hesitant to move some capital from Berkshire but it's a high bar.
Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to ppant here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
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
Unthreaded | Threaded | Whole Thread (4) |


Announcements
Berkshire Hathaway FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community