The Rational Walk
Intelligent Investing is not a "Random Walk"

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:

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