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Berkshire Hathaway Inc. Message Board

  • balak_joshi balak_joshi Apr 18, 2012 1:05 PM Flag

    BRKA Value 180,000 according to Tilson

    T2 partner Tilson says BRKA worth 180,000 intrinsic value

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    • This place is like the Hotel California, you can check out but never leave.

      If Tilson or anyone for that matter believes BRK is worth $180k, he should be buying at these prices hand over foot. In fact he should be mortgaging his house to buy at these prices. Anyone care to wager when he bought his last shares?

      • 1 Reply to beachlawyer2003
      • <<In fact he should be mortgaging his house to buy at these prices. Anyone care to wager when he bought his last shares? >>

        I would wager, just in the last few weeks.
        This came out today from Tilson.

        "Of course this news reminds people that Buffett is 81, won’t live forever, hasn’t identified his successor, and that Buffett will never be completely replaced – he is unique. But we didn’t need a reminder, as none of this is news to us. We were fully aware of these factors as we bought the stock in recent weeks, making our largest position even larger, and knowing what we know today, we wouldn’t have done anything differently."

    • Tilson's too aggressive imho. He's including an underwriting profit, which imhv erodes the conservative economic truth of the dual-column method. See, imho it's fair to assume BRK at least breaks even on float and therefore to treat float as equity, based on BRK's longstanding pattern of underwriting profits across multiple insurance companies. However, the profit is the margin of safety in the assumption. When Tilson includes underwriting profit as part of his estimate of value, on top of treating float as equity, imho he's eroding the margin of safety in the estimate. I revised my views post-2007. A straight dual-column results in about 170k if pre-tax non-investment, non-underwriting profit is given a 10x pre-tax multiple, without bumping it up more for underwriting profits. Moreover, I like to shave 20 billion off the investments per share on the ground that Buffett's giant reserve cannot be used ordinarily for growth or investments, which shaves about 15k off the estimate by bumping that shave up a bit. So that gives me 155k for BRK's IV. Imho, that's a very conservative number because: (1) BRK's consistent underwriting profit is entirely disregarded to preserve a margin of safety in the assumption that float is zero-cost, and (2) the 20 billion reserve is disregarded as if it didn't exist, even though that's BRK's money.

      Conclusion: conservative IV is 155k.

    • He selling or buying?

      Not what does he say, I mean what does he need to do?

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