Episode summary
Dylan Jovine | Is Berkshire Hathaway a Bargain? Inside Buffett’s $1T Empire
Summary
Dylan Jovaneau argues that Berkshire Hathaway may still be cheap even after Warren Buffett’s retirement as CEO. He says he challenged his instinct to avoid the stock and instead ran a sum-of-the-parts analysis on Berkshire’s operating businesses, separate from its cash and equity portfolio.
Using 2025 results, he says Berkshire’s trillion-dollar market cap includes about $373 billion in cash and a $285 billion equity portfolio, leaving the operating businesses implied at roughly $340 billion. He then estimates the value of BNSF, BHE, Geico, reinsurance, MSR, and smaller businesses at about $530 billion to $550 billion, which he says would be a 35% to 40% discount to public-market peer multiples.
He also argues that Greg Abel could make Berkshire better operationally than Buffett did because Abel is an operator who can push margins higher. On that basis, Jovaneau says Berkshire looks like one of the best quiet opportunities in the market and even better than a stock-based mutual fund for conservative investors.
Key takeaways
- Dylan Jovaneau says Berkshire Hathaway’s operating businesses are worth about $530 billion to $550 billion versus an implied $340 billion market value.
- He estimates Berkshire’s cash at $373 billion and its equity portfolio at $285 billion, which he says explains the low implied value for the operating businesses.
- Jovaneau argues Greg Abel could improve margins because he is an operator, unlike Buffett’s more hands-off style.
- He says Berkshire could be a 35% to 40% discount to peer valuations if each business were priced at industry multiples.
- He calls Berkshire one of the best quiet opportunities in the market and better than any stock-based mutual fund right now.
Notable quotes
“Berkshire Hathaway might be a screaming buy, believe it or not”
“the market cap for Berkshire Hathaway is a trillion dollars. They're sitting on cash of 373 billion dollars”
“what the market is saying is their entire business, their operating businesses, have an implied valuation of 340 billion dollars”
“the sum-of-the-parts valuation I came up with for Berkshire Hathaway, for their operating businesses alone, is 530 to 550 billion dollars”
How the episode opens
Good morning. This is Dylan Jovaneau behind the markets. Happy Thursday.
Today is Thursday, April 23rd. And I'll tell you something. Big question that I've been asking myself lately is Berkshire Hathaway actually cheap?
And I've been talking about semiconductor stocks and chips in the supply chain for so long. This is a bit of a thought experiment that I've been doing behind the scenes while that's been happening. I've been doing it at night.
Now, many of you guys know that Warren Buffett is the great business teacher of my lifetime. I stumbled upon him after losing all my money on one trade. This is in my 20s.
An analyst at the first firm I worked for told me go whole hog on a stock called Comtronic. I put everything I had into it at 22 bucks a share. I came into the office days later and I went to my Quotetron.
It was called the Quotetron back then. And it opened up at two bucks a share. There was accounting fraud.
And I thought to myself, "Oh my goodness. I lost everything on one trade in days. And I said, "How do I avoid doing things like this?
How do I learn? Did it shook me up so much that it pushed me on a line of asking questions which led me to Warren Buffett, who's the greatest investor to ever do this? And how do we avoid this kind of stuff?
And everything I do today is run through the things I learned spending decades reading his shareholder letters, really understanding the business analysis aspect of what we do. So, anyway, Warren Buffett retired as CEO at the end of the year, last year, December. And I've been asking myself immediately I've not been thinking about Berkshire Hathaway.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- berkshire valuation
- sum-of-the-parts analysis
- buffett empire
- ai supply chain
- semiconductor stocks
Companies and tickers mentioned
- BRK-B
- BRK-A
- AAPL
- AXP
- MCO
- TSLA
- Berkshire Hathaway
- Apple
- American Express
- Moody’s
- Tesla
- SpaceX
Watch the episode
Watch “Dylan Jovine | Is Berkshire Hathaway a Bargain? Inside Buffett’s $1T Empire” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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