The main thing here is that Buffett has no control over the share price of Berkshire Hathaway. In his interviews and reports he never mentions the price, except to say that he would like it always to be roughly equal to the intrinsic value of the stock itself.
For example, each year in the Annual Report he writes, ?To the extent possible, we would like each Berkshire shareholder to record a gain or loss in market value during his period of ownership that is proportional to the gain or loss in per-share intrinsic value recorded by the company during that holding period.?
Over time, Berkshire has fluctuated less that the overall market. Even so, there have been some high peaks and deep valleys. In 1998 it was as high as $84,000 dropping to $40,800 in 2000. (These figures are for the ?A? shares. The ?B? shares trade at one thirtieth of the price.)
But while the price has been going through these highs and lows, the book value, with a one exception over 35 years, has been marching upwards each year. For example, over the past five years, the book value has increased by an average of 10 percent per year. Over the same period, the S&P 500 index, with dividends included, has decreased by an average of 37 percent.
So, just like any other stock, at times BH is wildly overpriced, and others it may well be underpriced. The current picture is distorted by the gross overpricing back in 98-99. Just focus on how much wealth BH is creating internally per share. For as surely as the sun rises, this will eventually feed into the share price.
