Stock price hardly moved in the past month while Berkshires underlying assets boomed. To wit:
1. Stock portfolio increase $3B+ in value.
2. BAC warrants up $1.2B.
3. GS options up $600M+
4. Derivatives up $5B. It is now clear borrowing a complete financial collapse that Buffet made $5B on that sale. The market is so far above any put price, you might as well just say Ka-ching $5B
5. Operating business made another $1B, now their usual run rate.
So in the past 30-days, I count 1-5 to add up to $10.8B in gains. Even Apple is not coming close to those kinds of numbers.
As mediocre as the stock price is, the underlying businesses are killing it!
and now...we've got the sleeper asset. GE Warrants. GE Stock, Out of the money sitting at just $15 6 months ago, the stock is now above $20 and climbing fast. Berkshire has the right to purchase 134.8 million common shares in GE at $22.25 each up until the end of next year. The odds are better than 50% now that the GE warrants will be in the money.
BAC up 40 cents today puts another .40 x 700,000,000 shares = 280M in the money.
Here Berkshire on this little side bet is making hundreds of millions of dollars a day recently. This has nothing to do with the core business or the stock portfolio. It is just a little $5B side bet from a $200B company.
Berkshire is a money making machine!
MORE ON BAC WARRANTS:
..BAC up another 23 cents today. .23 X 700M = $140M.
Almost daily now, Berkshire has produced these kinds of underlying asset gains. We have seen this repeated since early October.
So let's just do some math. A little $150M gain every day (most have been much bigger than this) times 20 business days is $3B per month or $36B per year. Berkshire is a $200B market cap, call it Price/Asset Appreciation = 18%.
That would be fine and actually pretty stellar by itself. Probably better than 95% of all hedge funds.
But, Berkshire is also earns $1B per month in net operating earnings.
Add operating earnings to asset appreciation and the math just gets silly.
Ad hominem arguments always make the person using them look bad. That's debate class 101 stuff. I know you are much smarter than to use such 3rd grade tactics.
Exactly what part of my post and logic are you challenging and why? Please try to state your argument in a logical rhetorical statement which actually supports your position. Otherwise, we you don't have such an argument, and you are reduced to name calling (i.e. back to the 3rd grade discussions).