Berkshire Hathaway Inc. (BRK-B): A Bull Case Theory

Core Thesis - Berkshire Hathaway Inc. presents a compelling long-term investment opportunity, with a strong financial position and attractive entry point in the current market environment [2][5] Financial Metrics - As of December 2nd, Berkshire Hathaway's share was trading at $506.65, with trailing and forward P/E ratios of 16.26 and 23.09 respectively [1] - The company's shareholder equity has grown to approximately $698 billion, with an insurance float of $176 billion and cash and cash equivalents totaling $386 billion [2] Valuation Insights - The market has underpriced Berkshire's stock this year, influenced by perceptions of missing out on AI-driven growth, with a price-to-book ratio near 1.3x, historically favorable for long-term investors [3] - The combination of substantial capital, disciplined insurance operations, and a history of successful capital allocation supports the investment thesis [3] Management Considerations - Concerns exist regarding Greg Abel's ability to match the capital allocation success of Warren Buffett and Charlie Munger, which may impact future deployment decisions [4] - The concentration of Berkshire's portfolio introduces tail risk, as errors in capital allocation can lead to significant long-term losses [4] Investment Outlook - For patient, long-term investors, Berkshire's strong balance sheet, robust float, and favorable valuation metrics create a compelling case for accumulating shares over the next 12–18 months, with substantial upside potential [5] - The stock has appreciated approximately 10.97% since previous bullish coverage, indicating the thesis is playing out positively [6]