We Study Billionaires - The Investor’s Podcast Network

TIP625: Berkshire Hathaway w/ Chris Bloomstran

Apr 21, 2024

01:16:56

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Legendary investor Chris Bloomstran shares insights on valuing Berkshire Hathaway, impact of cash on portfolio returns, components of stock market returns, S&P500 expected return, Berkshire Hathaway's intrinsic value, and capital allocation since 2018.

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Quick takeaways

Cash reserves impact portfolio returns but strategic capital deployment is key for optimal performance.

Managing cash reserves and capital allocation are crucial for long-term investment success.

Valuation of Berkshire Hathaway using 'sum of the parts' approach reveals structural advantages and intrinsic value.

Deep dives

Chris Brunstren's Exceptional Track Record Highlights Investment Success

Chris Brunstren, along with his company Semper Augustus, has displayed an impressive investment track record. Since 1999, their returns have averaged 11.5% compared to 7.6% for the S&P 500. This outstanding performance translates to nearly $15 return for each dollar invested with Chris, significantly surpassing the S&P 500's return of $8 per dollar.

Balancing Work and Personal Life in Investment Decisions

01:40

Maximizing Returns and Avoiding Cash Holdings

01:22

Analysis of Historical Profit Margins and Economic Factors

04:55

Caution against overestimating returns and considering potential negative returns

01:27

Introduction

2min

Optimizing Portfolio Performance with Cash Reserves

20min

Balancing Work and Investing Opportunities

5min

Analyzing Factors Affecting Stock Market Returns

17min

Assessing Berkshire Hathaway's Intrinsic Value and Long-angle Investment Network

9min

Berkshire Hathaway's Strategic Financial Activities

25min

Share Value Analysis, Client Letters, and Tesla Reports Discussion

3min

Stig has invited legend investor Chris Bloomstran from Semper Augustus to teach us how to value Berkshire Hathaway on today's show. Semper Augustus has an outstanding track record with a compounded annual growth rate of 11.5% on equities since his fund's inception on 2/28/1999, compared to 7.6% for the S&P500.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

01:37 - The impact of holding cash on your portfolio returns.

24:07 - How to understand the five different components that make up stock market returns.

33:14 - How to estimate the expected return of being invested in the S&P500.

40:57 - What the intrinsic value of Berkshire Hathaway is.

45:51 - How Berkshire Hathaway has allocated capital since 2018.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Stig’s 2023 masterclass with Chris Bloomstran on valuing Berkshire Hathaway | YouTube Video.
Stig’s 2022 masterclass with Chris Bloomstran on valuing Berkshire Hathaway | YouTube Video.
Stig’s masterclass with Chris Bloomstran on equity valuations | YouTube Video.
Chris Bloomstran’s website.
Read Chris Bloomstran’s letters to his clients.
Buffett resource on CNBC.
Check out all the books mentioned and discussed in our podcast episodes here.
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