I have been a shareholder for 12 yrs and I am certainly anxious about BRK and the market in general. However, I am confident in Warren's abilities. The $150,000/share last year was great but probably an overreaction. Just like the $89,000 is now. Back in 2000 BRK lost half its value and recovered just fine. I refuse to believe that Warren has lost his marbles...I think he is probably sitting back right now drinking a cherry Coke and looking at what great deals he can scoop up. 6-12 months from now we will be laughing about all this. Think I will pick up a few B shares just to feel like a player! Keep the faith !
It has nothing to do with marbles. He does not know where the economy of the world is going anymore than that group of Representatives grilling the auto industry. His book value is falling and he will need to mark to market all his investments and he is leveraged with $44 billion of debt. Each $1.5 billion is $1000 off book value. I can count $5000-8000 off BV. The stock trades at a multiple of BV. But should it? All other investment holding companies sell at a discount to BV. That would put the downside to less than $70,000 after the next quarters writedowns. I do not see the upside.
By the way, his cash hoard is way down to about $18billion. The balance sheet is leveraged with $170 billion of assets and $117B of net worth. That is 1.5 to 1 leverage. Great on the way up but deadly on the way down--like margin debt. If assets decline 20% in value, book value gets a hit of $22,000 or 30%.