I think you're looking at this the wrong way: BRK's bond "portfolio" is not intended as a long term investment. Buffett hates the idea of cash. The only reason we hold bonds is because we have to in our insurance operations or for liquidity purposes. I would bet that nearly all our bonds are short term maturities, so rising rates have little effect on their prices. In the mean time, we hold $70 billion dollars of float, earning miniscule rates. With normal interest rates, our float could earn billiions more each year. The value of our float is a function of what it earns. In today's low interest envrironment, it earns very little. To me, this is as good an explanation for BRK's low Price/BV ratio than any other that has been offered.