Berkshire updated November 8, 2017

Berkshire Hathaway is updated and rated (lower) Buy at $186.21 which was the closing price yesterday. At the moment the price has dropped slightly to $185.04.

With earnings down somewhat in the past year and with the price up about 30% in the last 12 months the stock is not cheap. But it may get a large benefit from the proposed corporate income tax reductions.

I have sold half of my position on which I had a 39% gain and which was in an RRSP account so that no capital gains taxes are triggered by the sale. I wanted to raise cash and also sort of hedge my bet on this stock.

Berkshire continues to have a HUGE cash position at $109 billion. Even as a percent of assets, to put the figure in context, the cash position is quite high at 16% of assets. I suspect that if Buffett / Berkshire does not find acquisition to reduce the cash down under about $60 billion it may well finally introduce a dividend, either a regular dividend or a one-time payout.

Warren Buffett is 87 years old and shows no sign of slowing down. But of course health issues could arise and force him to step down at any time. It’s always possible that he will curtail his role at any time but so far he has given no indication that he will do that. The Board knows who would replace Buffett he were gone at any time.

Berkshire’s book value per share is up 963,100% since Buffett took over the company. I have information that Buffett has his eye on seeing that figure rise to one million percent (another 3.83% from here would do it). It’s always possible that Buffett would see attaining one million percent growth in book value as a convenient time to retire. But again he may just continue to march on. The share price gain is already up around two million percent, but Buffet has always used book value per share as his yardstick to measure progress.