Berkshire Hathaway: In Search of the “Buffett Premium”

Important Note:  This report was published on March 1, 2011 after Berkshire Hathaway’s 2010 Annual Report was released.  As of June 23, 2012, the report is available for download free of charge.  Please note that the data and valuation in the report have not been updated to reflect developments at Berkshire since the date of publication. 

The corporate identity of Berkshire Hathaway will always be inextricably linked to the remarkable career and investment track record of Warren Buffett. Mr. Buffett’s tenure at the company has spanned nearly five decades and has transformed a dying textile business into one of the world’s largest and most respected conglomerates with operations ranging from insurance, utilities, and railroads to candy, underwear and bricks.

Berkshire is not only respected based on its impressive financial results, but also due to the unique business philosophy that often makes the company the only logical buyer for high quality family businesses. While Mr. Buffett has shown no signs of stepping down anytime soon, his 80th birthday last year increased speculation regarding succession.

Berkshire Hathaway:  In Search of the “Buffett Premium” takes a close look at management succession issues in the context of a careful examination of the drivers of intrinsic value.  Incorporating the data contained in Berkshire’s 2010 annual report and related SEC filings, The Rational Walk’s 118 page report provides extensive coverage of all key facets of Berkshire Hathaway and an estimate of intrinsic value based on three well regarded valuation methodologies.

Based on business fundamentals at the date of the report on March 1, 2011, we estimate the intrinsic value of Berkshire at between $150,000 and $170,000 per Class A share.

As of June 23, 2012, Berkshire Hathaway:  In Search of the “Buffett Premium” is available as a free download.

 

Selected Reader Comments:

“I have read many books and articles about Berkshire Hathaway, Charlie Munger and Warren Buffett and your briefing book was great! I learned a lot and will probably start over and read it again. It was logical, sound and came across as very credible.”

“I want to congratulate you for a very lucid analysis. It amazes me that this company is so misunderstood by the general business media. I hope your analysis contributes to a greater understanding of the company.”

“Your presentation is easy to follow and conservative in approach. I deeply appreciate your the work, effort and analysis you put into it. I feel I have a much better understanding of Berkshire Hathaway because of your efforts.”

“I thoroughly enjoyed your briefing book. It was very well written and covered every aspect of the business very well.”

“You’ve done a terrific job. It’s by far the best thing I’ve read on Berkshire.”


© Copyright 2009-2014, The Rational Walk LLC. All Rights Reserved.