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  • Berkshire Hathaway: Undervalued And Ready To Jump [View article]
    I apologize for my lack of numbers. I like to reason out my investments, and determine why the company will succeed, rather than focus on the numbers. Here is why Berkshire is significantly undervalued. Berkshire currently has a $222 billion market cap. Let's break down what the company owns. It currently has $74 billion in marketable equities, $32 billion in fixed income, $47.8 billion in cash, $20 billion in goodwill from BNSF & MidAmerican (both which Buffett believes are way below intrinsic value), equity from its manufacturing, service, and retail division of $37 billion(which Buffett once again believes is undervalued), and a float from its insurance conglomerate of $70 billion which grows substantially every year. Total that up and you're already above its market cap. That's not including many of its other companies. Sure the company has debt, but Berkshire is one of the most liquid companies out there. By buying Berkshire now, you're essentially getting Buffett running the company for free. That's why I believe its a bargain.
    Jan 1 05:13 PM | Likes Like |Link to Comment
  • Berkshire Hathaway: Undervalued And Ready To Jump [View article]
    16x
    Jan 1 03:10 PM | Likes Like |Link to Comment
  • Berkshire Hathaway: Undervalued And Ready To Jump [View article]
    Yes that's definitely a huge factor. Buffett always makes very long-term investments, and my article tries to point out that over the past five years the market hasn't recognized Berkshire's growth. Give it five more, and I bet you'll be right on point.
    Jan 1 03:09 PM | Likes Like |Link to Comment
  • Berkshire Hathaway: Undervalued And Ready To Jump [View article]
    The reason Buffett has never issued a dividend is because he believes he can use the cash to enhance shareholder value more effectively through his many acquisitions. With an average 20% annual growth in intrinsic value since the creation of Berkshire-Hathaway, I believe that cash has been well spent, and will continue to be well spent. Buffett is a strong believer in the American economy, and has constantly said America will fix itself over the long-term. He has said this after multiple recessions in the past, and has proved to be correct. Buffett is great at taking advantage of investor fear, and has done a wonderful job of allocating capital in the past during such times. I believe he will do the same in these current economic conditions.
    Dec 31 11:15 AM | 10 Likes Like |Link to Comment
  • Berkshire Hathaway: Undervalued And Ready To Jump [View article]
    Yes, I completely agree. That cash is definitely the output of many of the wonderful businesses he owns. I believe he is keeping his money very liquid as cash, instead of putting it in very low yield money market funds, or bonds, in case he needs to quickly deploy it to make a large acquistion. It just goes to show he believes the market is beginning to value companies in his price range, and that he's ready to pounce on a good investment.
    Dec 31 10:27 AM | 1 Like Like |Link to Comment
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