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Berkshire Hathaway Highest ever Book Value! November 9, 2009

Posted by shaferfinancial in Finance.
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Berkshire Hathaway reported late Friday its 3rd quarter results.  As expected its book value went above $80K to $81,247 per A share.  It is now trading at 1.26 times book value.  Its book value is now at an all time high.  Pretty impressive performance in the middle of a recession!

However, there is still much more upside potential with its operating profits not fully recovered from the recession.  Many of its businesses are still suffering from the effects of the recession with reduced revenue and profits.

Total earnings did triple from the third quarter of 2008.

Proving its critics wrong, is one thing, but driving its book value to an all time high in a recession is simply an amazing performance.  The future is really bright as we see slow improvement in operating businesses this quarter over the first two of the year.  Tremendous value is being created by the deals Buffett made in the last 2 years and the purchase of BNI announced last week should continually improve both cash flows and profits for many years to come.

I will continue to own and add to my shares of Berkshire going forward.

By the way, there is tremendous upward potential over the short-term for Berkshire, IMHO, and folks who have been sitting on the sideline should now strongly consider purchasing BRK.

Next post will go over the other two stocks I own, HCN and MMP.

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1. Mike - November 9, 2009

Hi David,
For someone who has limited funds(10-15k) would you say that
the B shares of Berkshire would be the best ways to invest? It looks
like their B shares are currently priced around $3300 per share.
Or might there be a good mutual fund that owns significant assets
in Berkshire that you can recommend?
Thank you!

2. shaferfinancial - November 9, 2009

Mike, I never suggest mutual funds although there are funds that focus their holdings and hold Berkshire.

Currently, you can either purchase the B shares or go to one of the fractional share companies and purchase fractional shares. But, there is a good chance that the “B”s will be split 50 to 1 in the near future as part of the recent acquisition of BNI which would place them around $68 per share.

By the way I started accumulating the Bs with around $3K in which I bought 2shares! Of course it is better when you can buy shares when it is historically cheap, like now, and not have to buy them periodically when you have the money. But the latter has worked for me!

I just stopped buying them when it got real expensive in my opinion.

Mike - November 10, 2009

So, assuming this split happens would there be any advantage
to waiting or would it be better to just go ahead and purchase 3 or 4 of the B shares right now? Seems like if this split does indeed happen there might be a big rush of smaller investors which
would push the price up. Thoughts?

shaferfinancial - November 10, 2009

If you have done your due diligence and made your decision to buy, then there is no benefit to waiting. It will be easier to add shares in the future after a split.


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