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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: mungofitch 🐝🐝🐝 GOLD
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Number: of 21942 
Subject: Re: Attractiveness of Price
Date: 06/14/24 4:31 AM
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Given that Buffett..
A.) has bought stock at prices above today’s close...


Yes, but technically only A shares, not what most of us buy most days.
The A share closed at $611500, versus the highest absolutely known price paid $623205.69 in March.

In B share terms, which just closed at $405.92, the highest absolutely known repurchase was at only $357.22.
He would certainly pay more than that today, so I don't mean to sound like I'm quibbling meaninglessly, but it isn't a simple 1500:1 conversion as the economic interest would suggest.

The buybacks have shown a strong (and perhaps even rising) preference for A shares, so the observed "willing buyback" ratio is pretty far from 1500. I have estimated around 1540.
(e.g., the last two months that both A and B shares were purchase, the average prices paid had ratios of 1542:1 and 1544:1.

So, in round numbers and the 1540 guess, if he was willing to pay an average of $623206 in March for A shares, he would probably have been willing to pay around $404.68 for B shares based on prior actions.

Yet it's also worth noting that he didn't do so, despite B shares having traded below that price on half the trading days in March, and being much more liquid and easy to buy. Similarly, the B shares traded below 1/1540th of February's average A share repurchase price on 12 of 19 tradings day in February, but he bought no B shares. None since November, in fact. One might infer a relative attractiveness ratio considerably over 1540 might now be at work.

Reading between the lines is not that easy : )

All that being said, I think one is unlikely to do too badly with B share entries under $400, and I think Mr Buffett would probably grudgingly agree. Even if it is at a multiple of apparent value somewhat higher than the average in recent years. Worst case expectation is that you get a somewhat below average year or so at some point.

Jim
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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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