Half the fun of value investing is the detective work and the intellectual challenge (the other half being the warm glow of making money!) but sometimes The Hinterland has to just kick back and ride someone else’s investment thesis.
Here Whitney Tilson outlines his valuation method of Berkshire Hathaway, which is actually based Buffett’s own valuation method outlined in his 1997 annual letter.
In a nutshell, the intrinsic value of of Berkshire “A” is $194,000 per share and likely to reach $214,000 per share in 2014. As it is selling at $173,000 today The Hinterland is convinced and has invested in a major way, making Berkshire 38% of its portfolio.
It feels good to own a company who’s major problem each year is how to invest the tens of billions of dollars it throws off each year, which is run by the best capital allocator in history who is grooming two excellent apprentices (“Tod’n’Ted”) who are already outperforming the master.
The Hinterland is long Berkshire Hathaway.