Dude, you could not be more wrong!
Target buys close to, or modestly above, 1.2X book.
Buffy wrote, page 37 of the 2014 Annual Report:
"If an investor’s entry point into Berkshire stock is unusually high – at a price, say, approaching double book value, which Berkshire shares have occasionally reached – it may well be many years before the investor can realize a profit. In other words, a sound investment can morph into a rash speculation if it is bought at an elevated price. Berkshire is not exempt from this truth.
Purchases of Berkshire that investors make at a price modestly above the level at which the company would repurchase its shares, however, should produce gains within a reasonable period of time."
Just checked. Still no paperback copy, but the price for the Kindle edition dropped overnight!
Price dropped 62% (was $7.99 when added to List)
Auto-delivered wirelessly. Offered by Amazon Digital Services LLC.
We really need someone who is computer savvy to straighten this stuff out.
My guess is delivery to a Kindle device might be the simplest and most direct way to get a copy. My guess is the Kindle Cloud Reader might be a software simulator that you download and run on a standard PC that reads the book file off of Amazon's Cloud. The first several months of Cloud service might be free, but I would expect them to eventually charge a monthly fee (raising it annually) into perpetuity. Just guessing.
If anyone knows for sure, please chime in.
I'd buy the paperback edition at the price you mentioned in an earlier post, but I want nothing to do with another electronic device or to have to deal with cloud based stuff. Wi-Fi is aggravating enough.
Amazon is currently only selling the $7.99 Kindle Edition, with delivery to the Kindle Cloud Reader?
Amazon's "Look Inside!" will let you read a sample for free, it looks like it is the first two sections.
hjc, I doubt that you missed them, but I thought the following two articles had at least a little arithmetic "meat on their bones", so to speak, worth pondering:
« Buffett says would pursue big Berkshire stock buyback if warranted »
« Buffett says if the government did THIS the Dow could hit 100K »
Thanks, hjc. I've been doing something very similar.
Every since Mr. Wonderful brought out OUSA, I've been tracking eight ETFs/Funds.
Cumulative Total Returns
(7/14/2015 to 5/2/2016)
18.1% SPHD "High Yield + Low Volatility"
8.4% OUSA "Mr. Wonderful's"
4.1% VYM "High Dividend Yield"
2.8% VIG "Dividend Appreciation"
1.7% QDF "Quality Dividend"
0.9% VTV "Value"
0.3% VOO "500"
-0.6% VPGDX "Managed Payout"
I do own shares of VPGDX and, for obvious reasons, I'm not a happy camper. I'm trying to take Buffy's ground rule #5 to heart, and compare its performance against the alternatives over a period of at least three years before making a change.
Oh, by the way, I almost forgot, BRK-B did 4.1% over that period.
To find the article search for:
« Warren Buffett: 5 Controversial Quotes - The Cheat Sheet »
It deals with his wife's bequest: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.)”
hjc, in my opinion, a share reduction that doesn't increase the dividend per share is a worthless waste of money. The absolute dollar amount spent on paying the dividend, year over year over year, doesn't have to grow. It just gets distributed over fewer and fewer shares, which increases the dividend PER SHARE. And if the dividend per share grows then the price per share will grow, and everyone will be happy. The shareholders get income plus growth and the insiders's see the value of their options (which is pegged to the stock price alone) increase. THAT'S the beauty of it. Everybody wins.
hjc, I'm neither happy nor sad. I'm pretty much indifferent. I probable have a smidgen of IBM along with BRK-B indirectly via VPGDX, which probably owns a little bit of everything in the world, except for the securities of a handful of countries of dubious repute. By the way, that's not a recommendation.
My interest in IBM is strictly academic.
I was hoping for 13 cents (a 10% increase), but expecting 10 cents. So, no surprises there.
IMO, $1.40 per share per quarter is enough to support a price of $160 per share. That assumes that buy backs will continue to reduce the share count by at least 2% per year (2% in real, but financially engineered, growth) and that the market demands a real total return of 5.5%, which results in a capitalization factor of 3.5%.
hjc, I compose, edit and proof all substantial posts using an e-mail editor and save the result to "mail waiting to be sent" before I copy & paste it to the message board. I delete the mail copy only after I believe the message board has accepted it. So I almost always have a copy for a least a couple of hours after posting it. Having posts deleted is both insulting and frustrating, but I guess I just don't care enough to follow up on the "whys?".
All three posts contained an equation with numerical inputs.
The fist post contained a tilde symbol, which I use to signify "about" or "approximate". That's been a problem in the past. I also implied that the scenario I was suggesting would most likely require a change in control, which, of course, eluded to something natural, but unpleasant.
I removed the tilde and reposted. The repost was deleted.
Several days later I removed the offensive change in control language and tried again. The post was again deleted.
I gave up.
For me, the joy was in finally coming up with a solution that works for me to a puzzle that I've worked on since 2003. I don't care if anyone else appreciates it or not.
By the way, my first BRK-B purchase was a dud. Bought on 9/28/1998 at $1,978 per share, sold on 4/8/2003 at $2,305 per share, a 4.5 year IRR of 3.4%. My curiosity was piqued. What did I do wrong? And the journey began.
It does happen occasionally.
By the way, that's about 134% of BV, a MODEST premium (about 12%) to the 120% buyback threshold.
Tom, you and I are doing things differently, that's all I can tell you.
I've tried on three separate occasions in the recent past to post my methodology and each time the board moderator deletes my post.
IMO, only two types of people still value stocks by slapping an after-tax multiplier of 15X, or it's pre-tax equivalent (assumes a tax rate of about 33%) 10X, on earnings: the extremely naive and the incredibly lazy.
A long, long, time ago, in a time and place far different than where we are today, when companies paid a dividend that averaged about 60% of after-tax earnings and those companies could grow both their earnings & dividends annually by about 6% (in part, due to much higher inflation rates) a P/E of 15 made sense, it presumably would get you a 10% total return, i.e., 60% / (10% - 6% ) = 15. But that was a long, long time ago.
You would be well advised George, to watch out for that tree.
Of course he does!
"Berkshire Hathaway is Wedgewood Partners' largest holding" - Caveat emptor.
"We have chosen a pre- tax multiple of 10X,"
LOL!, If a credible valuation is the goal, then it's always best to just grab a number (multiple) out of the air without any justification whatsoever « sarcasm ».
Thank you for the suggestions, but I'll pass.
By the way, I do appreciate your "heads up" on articles of interest, do read them, and always "thank you" with a thumbs up.