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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", sykesix asked the members: "What do you do if you arrive early at movie besides go to the snack bar?" 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 ✹✺🐝🐝🐝 SILVER
SHREWD
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Number: of 22989 
Subject: Re: Tax effects on Berkshire
Date: 12/03/24 8:17 AM
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No. of Recommendations: 13
By the way, these tax changes you don´t see at a historical P/B chart. ;-)

You do in a way--
when the tax rates dropped in 2017, book value jumped upwards because the deferrred tax liability (largely from appreciated stock positions) was suddenly much smaller.
The stock price had risen strongly through 2017 and into early 2018.
As the stock price weakened in the first half of 2018, but the P/B fell a LOT (1.7 to 1.34) because known book jumped upwards on the release of the year-end report. I presume the market ran the stock up before that because it was known that the value of the firm (and book) were about to rise, then the financial reporting period lag caught up. So P/B was "artificially" high for a brief stretch around year end 2017 - after the market reaction but before the financial reporting caught up.

Jim
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This community has written 22,499 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 · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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