Thanks for the summary! Berkshire is in great shape as the transition approaches. With the stock back under 1.5x BV repurchases may soon resume. Berkshire has posted over $48 billion in net operating earnings alone over the past four quarters so the market cap is only slightly above 20x, and of course we have to add in some normalized figure for investment gains as well, so the normalized PE might be mid-teens. Reasonable in absolute terms and cheap relative to other mega caps.
Any theory on why the dismal numbers from Pilot? I know Abel made some managerial changes there but that was quite a while ago. Did the Haslem family sell them a lemon?
Hi John — I really wish we got more information on Pilot in the 10-Q because it was such a surprise to see it drop into the red. Pilot’s revenue actually increased $252 million in the third quarter and then, when discussing the earnings decline, the commentary combines the third quarter and first nine months of the year so it’s tough to see what actually caused the drop in this quarter specifically.
It’s a long ways off, but if Pilot is still struggling into next year I hope Abel explains what’s going on in either his annual letter or the AGM Q&A.
Thanks for the summary! Berkshire is in great shape as the transition approaches. With the stock back under 1.5x BV repurchases may soon resume. Berkshire has posted over $48 billion in net operating earnings alone over the past four quarters so the market cap is only slightly above 20x, and of course we have to add in some normalized figure for investment gains as well, so the normalized PE might be mid-teens. Reasonable in absolute terms and cheap relative to other mega caps.
I agree — it seems like we’re getting closer and closer to share repurchases starting back up again.
Any theory on why the dismal numbers from Pilot? I know Abel made some managerial changes there but that was quite a while ago. Did the Haslem family sell them a lemon?
Hi John — I really wish we got more information on Pilot in the 10-Q because it was such a surprise to see it drop into the red. Pilot’s revenue actually increased $252 million in the third quarter and then, when discussing the earnings decline, the commentary combines the third quarter and first nine months of the year so it’s tough to see what actually caused the drop in this quarter specifically.
It’s a long ways off, but if Pilot is still struggling into next year I hope Abel explains what’s going on in either his annual letter or the AGM Q&A.
Sad the Buffett era is really moving on, and fortunate to witness this moment. Also, really looking forward to how Abel will handle this!
Agreed! I wish the Buffett era could go on a lot longer, but mostly feeling grateful we got so much time to learn from him and Charlie.