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That’s why I said “rouglhy”, the vast majority of the portfolio is publicly traded companies and half of it is Apple. Is exposure to those few private assets wo
by drexlspivey 5y ago
That’s why I said “rouglhy”, the vast majority of the portfolio is publicly traded companies and half of it is Apple. Is exposure to those few private assets worth 50%?
- deleted 5y ago[deleted]
- dazc 5y agoThe private assets provide the cash to buy the public assets, maybe?
- danielmarkbruce 5y agoMany of the public assets also provide cash.
- danielmarkbruce 5y ago"vast majority" isn't right though. The market cap of the company is $700 bill. The equities are worth around $350 bill. So people who spend all day figuring the value of Berkshire think the other assets make up 50% of the value. The book value of those private assets (worth about $350 billion) isn't especially meaningful. Amazon book value is $100 bill or something, the company is valued at $1.5T or so. Apple is less than 100 bill book value, market cap 2.5 trill or so. One could effectively arb out the 350 bill of equities, and they'd be paying 350 bill for a set of assets which have a book value of 100-150 bill. So what? It says nothing.
- voisin 5y agoAren’t the private assets held at book value (historical purchase price less goodwill and depreciation) and so likely dramatically understate market value?
- danielmarkbruce 5y agoYup, the book value is almost certainly understating what the assets are worth. But that isn't always the case. So, it basically means nothing. Folks have to do the analysis, and in this case they have.