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Berkshire Hathaway Inc. Message Board

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  • tomandjanewright tomandjanewright Sep 4, 2012 10:33 PM Flag

    Downside to 79 ?

    I can get to $82 to $82.50,a 4% increase, fairly easy.No mega reinsurance claims,the market is up 3%,a Billion dollar favorable derivative swing ,and a couple of billion in profits from the operating companies,and an underwritting profit from the insurance group,and I am there.

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    • 78.71 times 1.04 (4% INCREASE) = 81.7

    • baltbear Oct 23, 2012 7:48 PM Flag

      "the market" has nothing to do with book value--except when rats' droppings multiples are used to prove whatever somebody already wants to think.
      "No" insurance claims during period x says nothing about potential for claims.
      Any claim for "book" that is a multiple of the net receipts of a sheriff's auction is likewise fairly bogus.

      • 1 Reply to baltbear
      • But Balt, the market price of BRK's bond and stock portfolios do effect BRK's book value. Book Value is equal to Assets minus Liabilities. If the market value of some of the assets shrink with no commensurate contraction in the liabilities, then the BRK's book value will collapse as well.

        An analogy. Do you know why a crippled submarine sinks until it hits the ocean's floor? It is because the damaged submarine's density (mass per volume) at any particular depth is always greater than the density of the water it displaces. As the submarine sinks its mass never changes, but external water pressure increases with depth and that pressure continually crushes the hull, reducing its volume, which in turn continually increases the submarine's density, so that at any interim depth it is no longer buoyant. A cascading catastrophic failure. If the markets do undergo a contraction then I would suspect that BRK's stock price would follow a similar path.

133.03-0.72(-0.54%)Oct 9 4:01 PMEDT