Berkshire Hathaway Portfolio
As mentioned in a previous post, I am planning on switching funds from a Vanguard index fund to Berkshire Hathaway (BRKB) in order to take advantage of the tax loss writeoff. I thought it would be interesting to see just how much of the share price is made up of Berkshire's common stock holdings and other investments.
I've been playing around with EditGrid, an online spreadsheet tool that allows for access of live data from Yahoo! Finance and other data sources. It looks like a pretty neat tool, and I'm thinking of eventually converting my portfolio tracking to this spreadsheet.
Using SEC filings and the latest 10-Q, I attempted to piece together the current value of Berkshire's investment holdings. This should update automatically so I can always look at how Berkshire is trading relative to its investment portfolio.
I estimated that about $86B of Berkshire's $145B total market cap comes from its investments, roughly 60%. Converted to A share pricing, that yields investments per share of $56,044. This compares to 2007 year-end $90,343 investment per share as stated in the 2007 annual report (A shares closed at $141,600 in 2007). Tilson Funds put out a report estimating $86,000 investments per share in Q3 '08 and $76,000 investments per-share as of 11/19/08. For reference, A shares closed at $130,600 on 9/30/08 and $84,000 on 11/19/08.
NOTE: I'm not sure if my way of calculation is the same as the method used by Berkshire and Tilson Funds. I'll need to investigate further to make sure that I'm doing it correctly.
The point of all this is that Berkshire's investment holdings make up a large portion of its current market value. That means that the implied value of Berkshire's many businesses is quite small. On November 19, you could have actually bought Berkshire at a cost nearly equal to the value of its investments, meaning businesses like Geico and See's Candies were being included for free. That makes for a pretty compelling investment argument to me. In this environment, I would much rather own a collection of (undervalued) businesses and investments hand-selected by Buffett rather than any index fund that likely includes a substantial amount of garbage.
Disclosure: The author is long BRKB. Current TogaPF portfolio holdings here.
I've been playing around with EditGrid, an online spreadsheet tool that allows for access of live data from Yahoo! Finance and other data sources. It looks like a pretty neat tool, and I'm thinking of eventually converting my portfolio tracking to this spreadsheet.
Using SEC filings and the latest 10-Q, I attempted to piece together the current value of Berkshire's investment holdings. This should update automatically so I can always look at how Berkshire is trading relative to its investment portfolio.
I estimated that about $86B of Berkshire's $145B total market cap comes from its investments, roughly 60%. Converted to A share pricing, that yields investments per share of $56,044. This compares to 2007 year-end $90,343 investment per share as stated in the 2007 annual report (A shares closed at $141,600 in 2007). Tilson Funds put out a report estimating $86,000 investments per share in Q3 '08 and $76,000 investments per-share as of 11/19/08. For reference, A shares closed at $130,600 on 9/30/08 and $84,000 on 11/19/08.
NOTE: I'm not sure if my way of calculation is the same as the method used by Berkshire and Tilson Funds. I'll need to investigate further to make sure that I'm doing it correctly.
The point of all this is that Berkshire's investment holdings make up a large portion of its current market value. That means that the implied value of Berkshire's many businesses is quite small. On November 19, you could have actually bought Berkshire at a cost nearly equal to the value of its investments, meaning businesses like Geico and See's Candies were being included for free. That makes for a pretty compelling investment argument to me. In this environment, I would much rather own a collection of (undervalued) businesses and investments hand-selected by Buffett rather than any index fund that likely includes a substantial amount of garbage.
Disclosure: The author is long BRKB. Current TogaPF portfolio holdings here.
posted by Henry at
5:52 PM
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