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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (56612)	1/9/2016 5:36:10 PM
From: Paul Senior	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78717

If I understand what you are saying, it is book value and not price/book that is key, and that a reversal in book value indicates the buy, i.e. 2009, 2012. I'll stick with my price/book. Price/book has dropped to become low relative to price several times according to your chart (red line touches green line). 2009 was in retrospect an easy call (easy, in retrospect -- almost everything was cheap and almost everything subsequently moved up.) 2011 was next, and several people here mentioned they were buying during that time. Maybe a couple of times 2013 offered a buy opp with red line near green (stock then moved up) . After a buy signal in early 2014, the stock did rise. So several good times to have been buy signals for BRK. My opinion, anyway. Subsequently to early 2014, the red line stayed at or below the green line and remains there. Unusually long time. But not troublesome or worrisome for me. For me, I'm adding to my position. I say stock will improve and p/bk will rise from its current 1.3 as it has several times. My bet is history repeats. At least I'm sort of close to Buffett management who say they're interested in buying back shares when price/book is about 1.2. If you are using book value to make a buy decision, then you don't seem to have a data point now that indicates a reversal, so you would not be buying BRK at this time? ======== Look, we keep going 'round and 'round on this. We're just wasting time here, really. You ought by now to have concluded that after using p/bk for fifty years of stock market buying/selling, I'm not about to change. Whether I have or don't have a clue about value investing, it's useless to try to try to convince me of the error of my ways. If you are trying to convince others to your point of view or to keep offering a counterpoint to my view... you've done that many times already.

To: bruwin who wrote (56612)	1/10/2016 10:22:06 AM
From: Spekulatius	Read Replies (2) \| Respond to of 78717

BRK P/B is useful (less useful than in the past, but still) because it is an insurance company at it's core, because their stock market investments are marked at market prices and because they have done their accounting consistently the same way for a long time. Otherwise, doing a SOP or an earning based evaluation is better, but P/B is a reasonable shorthand in BRK case that everyone can calculate without having to dig into the accounting at all. With BRK, on can be reasonably sure that the intrinsic value correlates with book value for aforementioned reasons. BRK has goodwill on their balance sheet, but we know that WEB doesn't tend to overpay (although he does make mistakes), and this in combination with the organic growth of the industrial and insurance assets (Geico and others ) means that the intrinsic value has to be quite a bit higher than the stated book. We can also see that BRK's book value has been rising over time (his published table in the annual reports shows this), as well as the earnings power. We can also see that buying BRK shares when the price was in the lower end of the P/B range was yielding good results (just look at 2012, 2008, 2000), so there really is no reason why this should not reoccur in the future as well.

To: bruwin who wrote (56612)	1/10/2016 12:33:01 PM
From: Shane M	Read Replies (1) \| Respond to of 78717

Hi bruwin, Thanks for sharing the graphic you put together. My thinking along P/B range is informed to large degree on Buffett's letters discussing his expectation that intrinsic value and book value to diverge more going forward for BRK making slightly expanding P/B multiple appropriate as business grows through time. I wanted to share a link to what I thought was a pretty good writeup based on lookthrough earnings -taking the different parts of the business, breaking out earnings - and placing values on different holdings/types of businesses. seekingalpha.com And of course there's the Tilson analysis here that's always good to read each year tilsonfunds.com