We do that, too. For example, one of those Redditors owns 22,612 BRK.B shares and has been buying since late 2002.
Berkshire spent $25 billion in 2020 (all of its operating earnings) on buybacks at an average price of $205 per BRK.B share. That buying continued at almost the same pace in 2021 and the average price paid is $220 per BRK.B share.
We can't buy at that buyback price today, but many of us would gladly pay, say, $250 per share for BRK.B.
Buffett makes huge new investments very, very rarely. Three in the last 5 years.
Apple: buying began in 2016.
The 5 major Japanese trading houses (the sogo sosha -- Itochu, etc.): buying began in early 2019.
Verizon: buying began in late 2020.
They all trade at or near Berkshire's price, if not far below, and you get one new idea every few years.
There are other new purchases (Chevron, Kroger, AbbVie, Aon, RH, etc.), but these are small, lower-confidence positions that are often sold as soon as the price rises far enough. Probably Weschler and Combs, not Buffett.
Berkshire's investments are based on a deep understanding of the business and are intended to produce good long-term results. Factors like economic moat, trends in consumption, conservative valuation, etc.
For example, Berkshire purchased Apple (AAPL) between 2016 and 2018, at an average price of $35 per share (P/E ratio of 12 or 13), and it was years before that paid off. The Redditors buy during those years, before the payoff.
There's a community on Reddit that studies Berkshire's purchases (investments made by Buffett/Weschler/Combs) and tries to follow, purchasing only below what Berkshire paid:
For example, in 2020 and early 2021 Berkshire paid $59 for Verizon, buying $9 billion worth (a huge Buffett/Weschler telecom investment). Verizon now trades at about $54, so this community is buying.
I put in a little effort each day, but thousands of people benefit. Small work, big impact. Contributing on Reddit is an easy way to have a meaningful effect on the world.
For example, investment subreddits are generally very bad, yet the Berkshire Hathaway subreddit (r/brkb) is able to keep the rot out without becoming an echo chamber:
This subreddit has literally dozens of value investor moderators, and the bubbles (cryptocurrency/ARK/Musk) are forcibly excluded.
The result is a forum where Buffett's principles of intrinsic value (discounted cash flows) and moats, etc., are explored for Berkshire and the many connected companies (e.g., Verizon).
I blame the education system. Basic investing theory should be taught in high school.
We have to think of a share price as a number that is a sum of all future earnings, divided by powers of an interest rate according to how far in the future those earnings will be produced. That allows us to evaluate whether a share price is reasonable or unreasonable.
This concept is complex and most people can't understand it without formal education.
That education doesn't occur, so we have a huge mass of investors who have no idea what share prices mean. How can they possibly make good decisions?
Berkshire is overflowing a 32-bit unsigned integer representation. When an unsigned integer exceeds its maximum representable value, it wraps around starting at zero.
If you add 1 to the maximum, you get 0. If you add 2 to the maximum, you get 1. If you add 3 to the maximum, you get 2. If you add 4 to the maximum, you get 3. And so on. The number wraps around to zero (it's modulo 2^32).
They're using a 4-byte (i.e., 32-bit) unsigned integer to represent the price in terms of ten-thousandths of a dollar.
For example, the standard size of an "unsigned int" in C on most modern systems is 32 bits. The maximum value you can express in a 32-bit unsigned integer is 32 one-bits:
1111 1111 1111 1111 1111 1111 1111 1111
This binary number is two to the power of 32, minus 1 (i.e., 2^32 - 1) which is, in decimal:
4,294,967,295
This integer represents $429,496.7295 because the price is specified in ten-thousandths of a dollar.
The Berkshire A-share (BRK.A) exceeded that price.
The B-share (BRK.B) equivalent price is $286.33 (divide A-share price by 1,500).
"No CNBC coverage."
CNBC stands for Chemical Nuclear Biological Cyber. This policy has been in effect for twenty years, thanks to Buffett's foresight.
If you want to learn more about Berkshire, join us on Reddit:
https://old.reddit.com/r/brkb/