Berkshire Hathaway: The Apple Risk

Jordan Sauer profile picture
Jordan Sauer
3.7K Followers

Summary

  • Berkshire Hathaway is a financial fortress, but BRK.B still comes with risk. One of those is what I like to call, "The Apple Risk."
  • I'll explain why I sold my BRK.B shares, taking a deep dive into Berkshire's stock portfolio.
  • Berkshire trades at 16x my estimate of normalized earnings. In the decade ahead, I'm estimating returns of 7% per annum.

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Intro

Buffett's often said Berkshire won't be one of the best performing stocks in the market, nor will it be one of the worst. I'd generally agree with this statement, and maintain a "hold" rating on BRK.B. We'll dig into Berkshire's normalized earnings and expected returns, as

This article was written by

Jordan Sauer profile picture
3.7K Followers
A natural contrarian, business student, and value investor, I seek opportunities in the market that present outsized returns. I am constantly analyzing financial statements, stress-testing my opinions, and studying the principles of great investors.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article includes base-case scenario estimates, using known facts and economic projections. The future is uncertain, and investors must draw their own conclusions.

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