Quantitative Valuation of Coupang ($CPNG)

(i watched my investment in Coupang fall from a +30% to a present near -40%. All in less than a year due to a major data breach. anyway, this post isn't about the why or the how. The purpose of this post is how to think about valuation.)

Coupang Inc. FY End December. This report: Q2-FY2026. Today: 19th August 2026

a. SP: $15.5 Market Cap: 28bn Revenue 35.46bn

b. TTM EPS (Diluted) -0.42, (ADJ): -0.20, (Zack's): -0.20

c. yield -, (5 year average) - , (Buy Back Yield): 3.90%

d. ROA, ROE, ROIC: -, -, -

e. P/E (trailing): , P/E (5YA): -, P/E (FWD): -

f. Debt/Equity: 1.89 Net Debt / EBITDA (5.63 - 6.11) / -EBITDA < 0

g. FCF Conversion: ttm: -0.13, 2025-> 2.51, 6.54, 1.29 <-2023

h. Growth (past) Stated:

Revenue %	06/30/2026
Year Over Year	3.89
3 Year Average	14.90
5 Year Average	14.61
10 Year Average	—

i. Manual calculation: none

j. management guidance:

Q3-FY2026 (next quarter) in constant currency at 8-9% revenue growth.

Product commerce will recover by mid 2027 back to 2025 pre-data breach levels

k. Valuation approach.

I am not going to use DCF or Earnings or Cash based numbers to do the valuation. The reason is because they were only recently profitable, and becasue of data breach, they won't be profitable until 2027.

I will use a a price/sales approach instead, as it is more stable. This is not dissimilar to Amazon com which CPNG is loosely based on, and after six years after IPO was Amazon finally GAAP profitable.

(i) First i will try and figure out what is the sales that we can expect at the end of 2030. (ii) Then I will work out how are the peers currently priced at, in terms of P/S, on a present and 5 year average basis. (iii) Lastly, i will apply the group p/s to the 2030 Revenue to derive the 2030 implied share price. (iv) Based on this, i will work out the rate of return back to the present price.

(i) estimating sales by 2030

Various	2029est	2030est	CAGR
SA	-	48.64bn	7.09%
MSNR	-	49.89bn	7.64%
DCF	46.77bn	-	7.88%
Eulerpool	48.75bn	-	9%
VV. io		55.4bn	10%

I will use a 8% CAGR revenue growth off 2025's 34.53bn for the next 5 years.

(1.08) ^ 5 x 34.53 = 50.7359 bn

(ii) Calculating peer group P/S

Company	Current P/S	Average 5 year P/S
Coupang	0.81	1.40
Amazon	3.64	2.97
Naver (Korea)	2.60	3.43
Alibaba	2.17	1.96
PDD	2.08	4.07
Mercadolibre	2.56	5.13
SEA Ltd	2.67	3.35

I reject the obvious outlier the present e-commerce peer group are all hovering around a P/S of 2+ except for amazon and coupang. And their 5 year average were around 2+ to 4.

Peer Group	P/S	5 year P/s
Peer Group Averages	2.4	3.15

(iii) To calculate the implied share price in 2030. We have to find out the revenue / share. We already have the revenue, we need to figure out how much is the shares outstanding likely to be by 2030. A quick search shows that although management is buying back shares, it is still diluting at about 1-1.5% a year.

Applying the maths, we get 1.837bn x (1.015)^5 = 1.979bn shares outstanding in 2030.

This works out to 50.73bn / 1.979 Revenue per share by end 2030 or $25.63 revenue per share.

Implied Share Price	Average P/S	Average 5 year P/s
Peer group	2.4	3.15
Coupang Sales / SH	25.63	25.63
Coupang Implied Share price End 2030	$61.51	$80.8

(iv) Calculating Rate of Return

Recent share price is 15.50

Implied 2030 price is $61.51 to $80.8

Rate of Return = 31.74% to 39% CAGR

Comments: I like to do this sort of simple valuation first, so that when i read up on the business later, i can ask myself the key questions: (1) how confident i am that management can recover from the issues, and the business can continue the growth trajectory. How confident am i of the 8% Revenue growth, whereas Morningstar is only projecting 6% revennue growth with a fair value of $25.80. (2) What do the superinvestors see in CPNG, that they are recently buying/adding ? (3) Lastly, in 2024, the average P/S of the peer group was around 4, and now it is 2+, it is cheap now and will revert to mean at 4 or is this re-rating of e-commerce websites the new normal ? Will they be rated below 2 in the future ?

( it was suggested to me to post this here. I copied this from the 1989 book "Classics: An Investor's Anthology.", published by the CFA Institude.)

THERE ARE ONLY THREE WAYS TO GET RICH

THEM THAT'S GOT GETS

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Fred J. Young

Fred Young was a key member of the Trust Department of the Harris Bank and continues to inform and entertain with talks and a book having the encouraging title, How to Get Rich and Stay Rich. Here are some excerpts.

THERE ARE ONLY THREE WAYS TO GET RICH

1. Inherit it. If you can see that you are going to inherit it, then you have it made. You can skip to the part of this book about staying rich. Someone else has already made the sacrifice of spending less than they earned to create this wealth for you. You should be grateful. You didn't have anything to do about it; your ancestry is completely beyond your control. You are fortunate indeed.
2. Marry it. This is an area in which you do have some control.

This is something you can work on, but you have to get started on it before you get involved with some poor person. This can be quite a project, and I have seen both men and women work this approach to wealth quite effectively. I see nothing wrong with it. I grew up in an area and at a time when most people, boys and girls, firmly believed that the Good Lord made someone especially for them. Growing up for these young people was largely a search for their "intended." Well, if your intended, when you find him or her, happens to have a lot of money, you should graciously accept the situation. Don't fight it.

3. If you are not going to inherit it, and you have already blown the chance for wealth through marriage, then you have only one chance left to get rich. You spend less than you earn and invest the difference in something that you think will increase in value and make you rich.

What should you invest in? Most rich people I know got rich from

investments in one or more of the following:

1. Real estate
2. Own their own business
3. Common stocks
4. Savings accounts (thanks to the magic of compound interest rates)

\*\*\*\*\*

Good Luck

Any time you have a choice between good luck and good judgment, you should take good luck. Good luck, by definition, denotes success.

Good judgment can still go wrong.

\*\*\*\*\*

Courage

A very important ingredient of successful stock investing is courage.

The courage to buy when others are selling; the courage to buy when stocks are hitting new lows; the courage to buy when the economy looks bad; courage to buy at the bottom. If you look back over the years, You will note that the times when the gloom was the thickest invariably turned out to have been the best times to buy stocks.

But most people like to buy when everything is rosy and stocks are hitting new highs. That takes no courage. There is a great tendency to think that stocks will continue doing whatever it is they have been doing. If they have been going up, they will continue going up forever, think the masses. If they are hitting new lows, they will continue hitting new lows forever. Maybe they will continue declining a while longer after you buy them, but you are not likely to be able to know when the bottom has been reached. So your best bet is to pick a level you are willing to pay and proceed with part of your investment funds. If they go lower, you can buy more at even better prices. If they turn and go up, then you will make a profit on what you have.

\*\*\*\*\*

THEM THAT'S GOT GETS

This is a term I heard my father use over and over when I was a kid growing up in East Tennessee. I thought he originated it, but I learned later that this was not the case at all. Jesus Christ used this term, 2,000 years ago. Matthew 25:29 says, "For unto everyone that hath shall be given." Everytime I read this I think to myself how right He was.

Yet I find it presumptuous of me to be emphasizing that Christ was right. It reminds me of the well known story of British Field Marshall Montgomery who gained fame with his success in North Africa in World War II. The story goes that at one time he was addressing his troops and said, "Now as Christ said in the Sermon on the Mountain,... and I might add that He was right." That is the way I feel when I find myself pointing out that Christ was right when He said, "For unto everyone that hath shall be given."

Your first $1,000 is hard to get. If you put it in the bank and let it draw interest, your second $1,000 will be a little bit easier to get, but not very much easier. Your first $10,000 is hard to get. The second $10,000 is a little easier. Your first $100,000 is hard to get, your second $100,000 a lot easier. Your first $1,000,000 is very hard to get. Your second $1,000,000 is a snap.

\*\*\*\*\*

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Once you have made yourself rich, for gosh sakes don't lose it. The inconvenience of going from rich to poor is greater than most people can tolerate. That is the reason they tend to destroy themselves. It is an unusual person who can gracefully make the transition from riches to poverty or even from being rich to modest circumstances....

How do you stay rich once you get rich? Don't hesitate to seek professional help. Staying rich usually requires an entirely different approach from that of getting rich. Lots of people know how to make money, but are not gifted at all in the art of preserving it. Frequently, the risk that was involved in making you rich is the same risk that can make you poor again.

\*\*\*\*\*

(I copied this from the 1989 book "Classics: An Investor's Anthology.", published by the CFA Institude.)

THERE ARE ONLY THREE WAYS TO GET RICH

THEM THAT'S GOT GETS

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Fred J. Young

Fred Young was a key member of the Trust Department of the Harris Bank and continues to inform and entertain with talks and a book having the encouraging title, How to Get Rich and Stay Rich. Here are some excerpts.

THERE ARE ONLY THREE WAYS TO GET RICH

1. Inherit it. If you can see that you are going to inherit it, then you have it made. You can skip to the part of this book about staying rich. Someone else has already made the sacrifice of spending less than they earned to create this wealth for you. You should be grateful. You didn't have anything to do about it; your ancestry is completely beyond your control. You are fortunate indeed.

2. Marry it. This is an area in which you do have some control.

This is something you can work on, but you have to get started on it before you get involved with some poor person. This can be quite a project, and I have seen both men and women work this approach to wealth quite effectively. I see nothing wrong with it. I grew up in an area and at a time when most people, boys and girls, firmly believed that the Good Lord made someone especially for them. Growing up for these young people was largely a search for their "intended." Well, if your intended, when you find him or her, happens to have a lot of money, you should graciously accept the situation. Don't fight it.

3. If you are not going to inherit it, and you have already blown the chance for wealth through marriage, then you have only one chance left to get rich. You spend less than you earn and invest the difference in something that you think will increase in value and make you rich.

What should you invest in? Most rich people I know got rich from

investments in one or more of the following:

1. Real estate
2. Own their own business
3. Common stocks
4. Savings accounts (thanks to the magic of compound interest rates)

*****

Good Luck

Any time you have a choice between good luck and good judgment, you should take good luck. Good luck, by definition, denotes success.

Good judgment can still go wrong.

*****

Courage

A very important ingredient of successful stock investing is courage.

The courage to buy when others are selling; the courage to buy when stocks are hitting new lows; the courage to buy when the economy looks bad; courage to buy at the bottom. If you look back over the years, You will note that the times when the gloom was the thickest invariably turned out to have been the best times to buy stocks.

But most people like to buy when everything is rosy and stocks are hitting new highs. That takes no courage. There is a great tendency to think that stocks will continue doing whatever it is they have been doing. If they have been going up, they will continue going up forever, think the masses. If they are hitting new lows, they will continue hitting new lows forever. Maybe they will continue declining a while longer after you buy them, but you are not likely to be able to know when the bottom has been reached. So your best bet is to pick a level you are willing to pay and proceed with part of your investment funds. If they go lower, you can buy more at even better prices. If they turn and go up, then you will make a profit on what you have.

*****

THEM THAT'S GOT GETS

This is a term I heard my father use over and over when I was a kid growing up in East Tennessee. I thought he originated it, but I learned later that this was not the case at all. Jesus Christ used this term, 2,000 years ago. Matthew 25:29 says, "For unto everyone that hath shall be given." Everytime I read this I think to myself how right He was.

Yet I find it presumptuous of me to be emphasizing that Christ was right. It reminds me of the well known story of British Field Marshall Montgomery who gained fame with his success in North Africa in World War II. The story goes that at one time he was addressing his troops and said, "Now as Christ said in the Sermon on the Mountain,... and I might add that He was right." That is the way I feel when I find myself pointing out that Christ was right when He said, "For unto everyone that hath shall be given."

Your first $1,000 is hard to get. If you put it in the bank and let it draw interest, your second $1,000 will be a little bit easier to get, but not very much easier. Your first $10,000 is hard to get. The second $10,000 is a little easier. Your first $100,000 is hard to get, your second $100,000 a lot easier. Your first $1,000,000 is very hard to get. Your second $1,000,000 is a snap.

*****

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Once you have made yourself rich, for gosh sakes don't lose it. The inconvenience of going from rich to poor is greater than most people can tolerate. That is the reason they tend to destroy themselves. It is an unusual person who can gracefully make the transition from riches to poverty or even from being rich to modest circumstances....

How do you stay rich once you get rich? Don't hesitate to seek professional help. Staying rich usually requires an entirely different approach from that of getting rich. Lots of people know how to make money, but are not gifted at all in the art of preserving it. Frequently, the risk that was involved in making you rich is the same risk that can make you poor again.

*****

(I copied this from the 1989 book "Classics: An Investor's Anthology.", published by the CFA Institude.)

THERE ARE ONLY THREE WAYS TO GET RICH

THEM THAT'S GOT GETS

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Fred J. Young

Fred Young was a key member of the Trust Department of the Harris Bank and continues to inform and entertain with talks and a book having the encouraging title, How to Get Rich and Stay Rich. Here are some excerpts.

THERE ARE ONLY THREE WAYS TO GET RICH

1. Inherit it. If you can see that you are going to inherit it, then you have it made. You can skip to the part of this book about staying rich. Someone else has already made the sacrifice of spending less than they earned to create this wealth for you. You should be grateful. You didn't have anything to do about it; your ancestry is completely beyond your control. You are fortunate indeed.

2. Marry it. This is an area in which you do have some control.

This is something you can work on, but you have to get started on it before you get involved with some poor person. This can be quite a project, and I have seen both men and women work this approach to wealth quite effectively. I see nothing wrong with it. I grew up in an area and at a time when most people, boys and girls, firmly believed that the Good Lord made someone especially for them. Growing up for these young people was largely a search for their "intended." Well, if your intended, when you find him or her, happens to have a lot of money, you should graciously accept the situation. Don't fight it.

3. If you are not going to inherit it, and you have already blown the chance for wealth through marriage, then you have only one chance left to get rich. You spend less than you earn and invest the difference in something that you think will increase in value and make you rich.

What should you invest in? Most rich people I know got rich from

investments in one or more of the following:

1. Real estate
2. Own their own business
3. Common stocks
4. Savings accounts (thanks to the magic of compound interest rates)

*****

Good Luck

Any time you have a choice between good luck and good judgment, you should take good luck. Good luck, by definition, denotes success.

Good judgment can still go wrong.

*****

Courage

A very important ingredient of successful stock investing is courage.

The courage to buy when others are selling; the courage to buy when stocks are hitting new lows; the courage to buy when the economy looks bad; courage to buy at the bottom. If you look back over the years, You will note that the times when the gloom was the thickest invariably turned out to have been the best times to buy stocks.

But most people like to buy when everything is rosy and stocks are hitting new highs. That takes no courage. There is a great tendency to think that stocks will continue doing whatever it is they have been doing. If they have been going up, they will continue going up forever, think the masses. If they are hitting new lows, they will continue hitting new lows forever. Maybe they will continue declining a while longer after you buy them, but you are not likely to be able to know when the bottom has been reached. So your best bet is to pick a level you are willing to pay and proceed with part of your investment funds. If they go lower, you can buy more at even better prices. If they turn and go up, then you will make a profit on what you have.

*****

THEM THAT'S GOT GETS

This is a term I heard my father use over and over when I was a kid growing up in East Tennessee. I thought he originated it, but I learned later that this was not the case at all. Jesus Christ used this term, 2,000 years ago. Matthew 25:29 says, "For unto everyone that hath shall be given." Everytime I read this I think to myself how right He was.

Yet I find it presumptuous of me to be emphasizing that Christ was right. It reminds me of the well known story of British Field Marshall Montgomery who gained fame with his success in North Africa in World War II. The story goes that at one time he was addressing his troops and said, "Now as Christ said in the Sermon on the Mountain,... and I might add that He was right." That is the way I feel when I find myself pointing out that Christ was right when He said, "For unto everyone that hath shall be given."

Your first $1,000 is hard to get. If you put it in the bank and let it draw interest, your second $1,000 will be a little bit easier to get, but not very much easier. Your first $10,000 is hard to get. The second $10,000 is a little easier. Your first $100,000 is hard to get, your second $100,000 a lot easier. Your first $1,000,000 is very hard to get. Your second $1,000,000 is a snap.

*****

STAYING RICH IS FAR MORE IMPORTANT THAN GETTING RICH

Once you have made yourself rich, for gosh sakes don't lose it. The inconvenience of going from rich to poor is greater than most people can tolerate. That is the reason they tend to destroy themselves. It is an unusual person who can gracefully make the transition from riches to poverty or even from being rich to modest circumstances....

How do you stay rich once you get rich? Don't hesitate to seek professional help. Staying rich usually requires an entirely different approach from that of getting rich. Lots of people know how to make money, but are not gifted at all in the art of preserving it. Frequently, the risk that was involved in making you rich is the same risk that can make you poor again.

*****

(Note the Flair Basics / getting started.)

Previously I mentioned about the concept of the “pre-mortem” which I read from Pat Dorsey, to ask questions on what could go wrong with an investment and then work backwards to figure out the red flags that could serve as an early trigger.

Today, I want to share this snippet from Barton Biggs, noted investor, author and market strategist. In an 1977 essay on investment strategies, he wrote that that many first year funds performed better than funds in their 2nd or third year. While motivation and size were often the explanation, he concluded that the first year phenomenon could be explained by the manager, who is in cash and looking solely at opportunities versus the manager who is fully-invested.

He goes on to suggest a method to help portfolio manager stay fresh.

I am quoting from the last three pages of his article “Investment Strategy”

——————-

Or they may be stocks that he loves because they are "Great" companies with a capital "G" and have made him big money in the past. Investment managers, without realizing it, often personalize and become emotionally involved with stocks when the investment decision-making process should be completely intellectual and rational because, after all, they are just pieces of paper.

Or as Adam Smith put it, the stock doesn't know you own it, and there's no reward or pension paid for being a faithful long-term holder.

It is these "holds" that are too cheap to sell but not attractive enough to buy that make a portfolio stale and retard performance. An investment manager will say he has to see potential for at least a 50% gain in a year and a minimum risk-reward ratio of two to one in a stock before he will buy it, yet in his list he will hold many stocks in which he will admit the present potential is only 10%-20% and the risk-reward relationship is closer to one to one. And he won't even see the incongruity of this position.

Obviously, he can improve the portfolio's performance by selling the ten and twenty percenters and putting the money into fifty percenters.

Switching is hard (it's always easier to do nothing), and there's an inherent and natural resistance to it because the investment manager exposes himself to being wrong twice (i.e., the stock he sells goes up and the stock he buys goes down), but it's the only way to keep a portfolio young and vital. And after all, the word "manager" implies an active, involved role rather than a passive caretaker function. Furthermore, this writer would argue that rigorous, continual application of appreciation-potential analysis and risk-reward standards, while it maximizes the turnover in a portfolio, minimizes risk in that the relatively fully priced stocks are sold and relatively underpriced and attractive stocks are purchased.

Always provided, of course, that the stock selection judgments are competent.

It is significant that Bernard Baruch and Jesse Livermore, probably the two greatest private investors of the twentieth century, made it a practice completely to liquidate their holdings every so often, take a vacation, and start over by buying a completely fresh portfolio. The pattern of reinvesting from scratch is apparent from their writings, although there is no evidence that either did this as a conscious investment strategy or on a regular, predetermined basis, but yet it became almost an instinctive pattern of their operations.

Baruch relates in My Own Story how after each major investment undertaking, he would sell his stocks and "shake loose from Wall Street to go off to some quiet place where I could review what I had done." He would come back, he says, refreshed with new approaches and fresh investment ideas. Jesse Livermore, when he felt confused about the course of the market or sensed the need for a change, would "take in his lines and get into cash" and "go fishing or to Hot Springs." On his return, he would usually buy or sell short completely new stocks.

And in a way, Gerald Loeb, with his concept of "The Ever Liquid Account" where the investor automatically sells and thus gets into cash when his stocks start going down, is creating exactly the same effect. Loeb, incidentally, besides being a flourishing broker, was a canny investor with a trading orientation.

At the risk of belaboring the obvious, the point should be made again that an investment manager's performance capability is maximized by investing from a completely cash position.

However, it is impractical because of the expense and market impact to even suggest that large portfolios be totally liquidated every so often in order that the manager can have the intellectual freedom and stimulation of a totally fresh approach.

However, a manager can simulate the effects and benefits of complete liquidity. Every year or eighteen months or for that matter whenever he feels his portfolio is stale and his performance is lethargic), the investment manager must discipline himself to go off alone without any interruptions for at least a day. He must make a powerful effort to detach himself and to pretend he has sold everything, and that he has nothing but cash. Then he must invest his "cash" by constructing a new portfolio based on that day's prices, current appreciation-potential analysis, and present risk/reward ratios. He must do this honestly, and he must work through the entire process of building a new portfolio, segment by segment, including position sizes.

This exercise requires considerable discipline, and is certainly not as effective as the real thing since the mind is not truly unfettered from the old portfolio. But it works surprisingly well.

Then, to complete the treatment and get full benefit from "the first year performance phenomenon," the investment manager must modify his real portfolio to conform to the new list. Obviously, there will be considerable overlapping, but almost invariably this exercise will result in a significant reduction in the number of stocks owned. Professional money managers almost without exception are far better buyers than sellers of stock. This program is buying oriented and thus emphasizes the strength yet indirectly accomplishes the objective of selling.

This purging process is no panace for poor stock selection.

However, it can help a competent manager to work his way out of a slump, and it certainly compels the elimination of the limited potential old lumber and forces concentration of assets in the best stocks where the maximum opportunity is. It is a device, a technique, to help the investment manager focus his thinking which eventually should improve his relative performance.

Maybe successful investing is like riding a bicycle—either you keep moving or you fall down.

—————

I am pretty sure by now we have heard all the reasons not to own Berkshire Hathaway.

So please post it in the weekly threads.

Let’s keep the new posts to new developments at Berkshire Hathaway.

Thanks

—————

Reasons not to own Berkshire Hathaway:

1999: Buffett missed out on dot com.
“What’s wrong Warren ?”

2012: Berkshire was Shorted by Seabreeze Partners. Because Buffett was old.

2019: Wedgewood Partners exited After 20 years because Buffett was sitting on 120bn of cash and missed out on MSFT. And hoarding was a sign of old age.

(I couldn’t find the right flair. So I labelling it as ai)

A speculative Barron’s article that perhaps Berkshire Hathaway might have bought MSFT. The truth will be out by tomorrow late afternoon as the deadline for filing the 13F.

Here is the pertinent quote:

Assuming Berkshire bought additional Alphabet stock beyond the disclosed $10 billion, that would leave about $7 billion in unaccounted-for purchases that could be disclosed Friday.

One possible purchase is Microsoft —there is some speculation that Berkshire took advantage of Microsoft’s depressed stock in the second quarter to establish a position.

The unaccounted-for new equity holdings likely are concentrated in the category of what Berkshire calls commercial, industrial, and other. That is one of three categories of its equity holdings, along with consumer and financial. Berkshire disclosed a sizable increase in its cost basis of commercial and industrial stocks in its second quarter 10-Q, showing that it was a buyer of stocks in that category.

https://www.barrons.com/articles/berkshire-hathaway-alphabet-microsoft-stock-52115df5

 

 

The Intelligent Investor

 Jason Zweig

[https://www.wsj.com/finance/investing/why-investors-fall-for-shooting-stars-b116f862?mod=djemintinvestor\](https://www.wsj.com/finance/investing/why-investors-fall-for-shooting-stars-b116f862?mod=djemintinvestor) 

Why Investors Fall for Shooting Stars

 

My colleague Spencer Jakab wrote last week about why investors seem to forgive fallen investing stars. A question that intrigues me is why investors fall for these shooting stars in the first place.

 

* Leopold Aschenbrenner’s hedge fund Situational Awareness was up 270% this year through May and had amassed $45 billion at its peak.
* Cathie Wood’s ARK Innovation ETF skyrocketed 153% in 2020, helping to attract $20 billion in new money to her firm by year end.
* At the end of 1999, then 29-year-old Ryan Jacob launched the Jacob Internet Fund. Lured by the 216% annual return at his previous fund, investors showered nearly $300 million at him in the opening weeks of 2000.

Big numbers! But, as Benjamin Graham warned in his classic book The Intelligent Investor:

 

Bright, energetic people—usually quite young—have promised to perform miracles with “other people’s money” since time immemorial. They have usually been able to do it for a while—or at least to appear to have done it—and they have inevitably brought losses to their public in the end.

And so it goes. Aschenbrenner’s fund lost 67% in July. ARK Innovation has trailed the S&P 500 by an average of nearly 23 percentage points annually since the end of 2020. Jacob Internet lost 70% in 2000 and 56% in 2001—and, since its launch, has lagged behind the S&P 500 by nearly 14 percentage points annualized.

 

**Why do investors never seem to learn?**

 

Like all humans, investors indulge in magical thinking. As the psychologist Daniel Kahneman told me years ago, “Luck and randomness are the likeliest—but least satisfying—explanations for extreme outcomes. Ordinary causes feel insufficient to explain extraordinary results.”

And the more surprising a result is, the more it cries out for an emotionally convincing explanation. As Kahneman loved to say, “Stories trump statistics.” If something seems miraculous—like doubling or tripling other people’s money in a few months—our intuition tells us the person who did it must be a miracle worker.

 

**Will that ever change?**

I recently was walking along 41st Street near the New York Public Library in Manhattan, where the sidewalks are inset with bronze plaques highlighting the power of words. I quickly found my favorite: 

&gt;A bronze plaque embedded in the ground, featuring a quote from Willa Cather, "there are only two or three human stories, and they go on repeating themselves as fiercely as if they had never happened before..."

Wise words from Willa Cather.

Among investors, one of those perennial stories is the young swashbuckling genius who comes out of nowhere, racks up gigantic gains on risky bets, attracts massive amounts of money, then crashes and burns.

That story goes on repeating itself as fiercely as if it had never happened before, and I suspect it always will.

https://www.barrons.com/articles/berkshire-hathaway-earnings-stock-buybacks-d5a6ac50

Berkshire Earnings Were Good—Not Great. A Real Bright Spot Was This.

By Andrew Bary

Aug 09, 2026, 6:21 pm EDT

Key Points

• Berkshire Hathaway reported a 16% increase in second-quarter after-tax operating profits to $13 billion, driven mostly by currency gains.
• Berkshire Hathaway repurchased $4.5 billion of shares in the second quarter and an estimated $3.4 billion in July.
• Berkshire Hathaway purchased about $23 billion of equities in the second quarter, including around $10 billion of Alphabet stock.

Berkshire Hathaway’s second-quarter operating profits were good but not as strong as the headline figure suggested.

The conglomerate reported a 16% increase in after-tax operating profits to $13 billion on Saturday, but the advance was driven mostly by a swing in one-time currency gains and losses that the company doesn’t strip out of its earnings. The big loser was Japan’s yen, which affects the carrying value of Berkshire’s $15 billion of yen borrowings that help fund its equity stakes in five Japanese trading companies.

So strip out the swing and the profit gain was closer to 6%.

Some of Berkshire’s industrial businesses showed outsize earnings increases, including Precision Castparts, aircraft parts; Lubrizol, chemicals; and IMC, specialized tools.

Underwriting profits, however, were lower at Berkshire’s big property and casualty insurance operations, including Geico, the nation’s No. 3 auto insurer. Insurance investment was down because of lower rates on the company’s huge holdings of cash and equivalents—most Treasury bills.

A highlight was Berkshire’s repurchase of $4.5 billion of shares in the period—plus about $3.4 billion in July, according to a Barron’s estimate based on the share count as of July 29 in th e 10-Q also released Saturday. That’s almost $8 billion in total and compares with just $235 million in the first quarter, which marked the first time Berkshire had bought back stock since May 2024.

The solid earnings and higher buybacks could support the stock on Monday.

The buybacks show that CEO Greg Abel and Chairman Warren Buffett think the shares are reasonably priced. Abel succeeded Buffett at year’s end and they collaborate on buybacks decisions.

“Despite more difficult insurance industry backdrop, the company continues to build shareholder net worth in Greg Abel’s first year as CEO,” said Mac Sykes, a portfolio manager at Gabelli Funds. “Material repurchases provide confidence for shareholders that some of the best corporate capital allocators see current value.”

Shareholder net worth is reflected in book value, which rose about 3% in the quarter to $522,000 per Class A share after gaining a similar amount in the first quarter.

The most recent quarterly increase was driven by earnings growth and gains in Berkshire’s $350 billion-plus equity portfolio, led by Apple and Coca-Cola. Book probably is higher now than the June 30 figure—perhaps around $535,000 per Class A share—because of equity gains since quarter ended.

Class A shares, which ended Friday at $780,086, are up 3% this year and are about 10 percentage points behind the S&P 500. The Class B stock finished at $521.80.

The stock has been lagging behind the S&P 500 this year as well as companies in similar industries in which it operates, including Union Pacific, railroads; NextEra Energy, utilities; and Chubb, insurance. This has frustrated many shareholders, and suggests the stock could rally and play catch-up with these companies.

Berkshire’s BNSF railroad unit saw a 6% increase in after-tax earnings to about $1.6 billion, but that gain was about half the adjusted increase in the earnings of its chief rival, Union Pacific.

BNSF trails Union Pacific in profitability as measured by its operating ratio, or expenses as percentage of revenue. Boosting profits at BNSF, a laggard among the six big North American railroads, is a priority of Abel—and the earnings report shows more work needs to be done.

On the buybacks, it will be interesting to see Berkshire’s appetite given theJuly rally in the stock. Berkshire is more price sensitive on repurchases than most big companies.

Many investors would like to see Abel use some of Berkshire’s cash, at about $360 billion in June, for equity purchases, buybacks, and acquisitions. All that has been happening although not a scale relative to Berkshire’s $1.1 trillion market value.

Berkshire bought about $23 billion of equities in the second quarter and sold just $3 billion, according to the 10-Q, marking one of its heaviest quarterly purchases of stocks in the past five years. Those buys included some $10 billion of Alphabet stock purchased in June when the search giant said it would be raising $85 billion of equity.

Berkshire paid $8.5 billion for home builder Taylor Morrison in July in what looks like an attractively priced deal. But the elephant-sized deal long sought by Buffett keeps eluding the company.

All told, it was an encouraging quarter. There were decent overall earnings after adjustments, pockets of strength in key industrial businesses, higher buybacks, greater equity purchases, and one notable deal.

Abel seems to be off a good start.

FIN

Berkshire Operating Earnings Rise 16% in Second Quarter. Buybacks Hit $4.5 Billion - Barron’s

By Andrew Bary

Updated Aug 08, 2026 1:52 pm EDT / Original Aug 08, 2026 8:23 am EDT

https://www.barrons.com/articles/berkshire-hathaway-earnings-stock-price-cca1ad5a

Berkshire Hathaway’s operating earnings after taxes increased 16% in the second quarter to $13 billion on strength at the company’s railroad, energy and manufacturing, service, and retailing unit, the company’s financial results released on Saturday show.

The earnings gain also reflected one-time currency gains in the second quarter that compared with currency losses in the year-earlier period.
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The operating profits exclude investment gains and losses.
The company bought back $4.5 billion of stock, up from $235 million in the first quarter, and one of the highest quarterly totals in the past decade.

The level of buybacks isn’t a surprise because a securities filing by CEO Warren Buffett in mid-July indicated that Berkshire bought back anywhere from about $5 billion to $11 billion of stock.

After repurchasing the $4.5 billion in stock, Berkshire continued its buybacks in July. It spent about $3.4 billion through July 29, the date of the 10-Q filing for the second quarter released in conjunction with the earnings report.

The July buyback total is a Barron’s estimate based on a comparison of the July 29 share count and the June 30 share count. Berkshire didn’t break out this figure.
The repurchases are a key figure in the earnings report because investors are interested in the company’s appetite for buybacks under CEO Greg Abel, who succeeded Buffett at the end of last year.
The heavier buyback activity in the second quarter could be taken as a sign that Abel and Buffett think the stock is attractively priced.
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Berkshire’s Class A shares, which ended Friday at $780,086, are up 3% this year and are about 10 percentage points behind the S&P 500. The Class B stock finished at $521.80.

Berkshire’s book value rose about 3% sequentially in the second quarter to about $522,000 per Class A share, Barron’s estimates. The stock now trades for about 1.5 times that book value estimate. Berkshire’s book value is probably higher now—closer to about $535,000 because of gains in its equity portfolio of about $350 billion.

The earnings were affected by one-time currency swings related to the company’s borrowings in foreign currencies, mainly Japan’s yen. The yen borrowings help finance and hedge the company’s investments in five Japanese trading companies.
Berkshire had a currency gain of $326 million, compared with a loss of $877 million in the year-earlier period. Strip out the currency swing and the second-quarter operating profits after taxes were up about 6% in the period, Barron’s estimates.

Berkshire, unlike most companies, doesn’t provide commentary in its earnings release and doesn’t adjust its profits for one-time factors like currency.
The operating profits per share topped the consensus estimate including and excluding the currency swings. The operating profits per class A share totaled $9.050, up 17% from the year-ago period and comfortably ahead of the consensus estimate of about $7,550.

The combination of the earnings beat and the buyback activity, particularly in July, could provide a lift to Berkshire stock on Monday.

It’s possible the buyback activity was constrained in the second quarter by the company’s $8.5 billion deal to buy home builder Taylor Morrison, which was reached in late May and closed in July. Companies can be restricted around the time of deal negotiations.

Cash totaled about $365 billion on June 30, down from $380 billion on March 31. The March figure was adjusted for a liability for some $17 billion of Treasury bills purchases at the end of the first quarter.

The adjustment in the most recent period is less than $1 billion. Buffett prefers to keep the bulk of Berkshire’s cash in ultrasafe Treasury bills and Berkshire owned $325 billion on June 30.
While Berkshire’s cash levels are down, they still are by far the most for any U.S. company.

One reason for the cash decline is that Berkshire was a net buyer of about $20 billion of stocks against net sales of about $8 billion in the first quarter.

The company bought $23 billion of stocks in the period, including, including $10 billion of Alphabetshares purchased in June when the search giant announced an equity raise totaling more than $85 billion.

Berkshire sold just $3 billion of stocks, compared with about $24 billion in the first quarter when it liquidated equity investments that had been managed by former manager Todd Combs, who left December for JP Morgan.

The biggest contributor to the earnings gain was the company’s manufacturing, service and retailing unit, which saw a 24% increase in after-tax profits to $4.5 billion.

In its 10-Q filing, Berkshire said the “increases were driven by earnings increases in our industrial products manufacturing and our services businesses.”

The rail unit, BNSF, had a 6% gain in after-tax earnings. Berkshire attributed the increase to “higher shipping volumes and improved operating efficiencies.”

BNSF has one of the lower profit margins of the six big North American railroads and CEO Greg Abel has vowed to improve profitability.

Berkshire Hathaway Energy, the company’s utility business that also operates natural-gas pipelines, had a 27% increase in earnings to $891 million.
Insurance underwriting declined 13.1% to $1.7 billion after taxes despite a lack of material catastrophe losses in the period. The major contributor to the lower underwriting income was a 45% drop in underwriting profits at Geico, Berkshire’s auto insurer, to about $1 billion before taxes.

Geico’s combined ratio—a key profit measure—weakened to 91% from about 83.5% in the year-earlier period. The combined ratio measures losses and expenses as a percentage of premiums; a lower number is more favorable.

Insurance investment income was down 9% to $3.1 billion, reflecting lower short-term rates, which depressed income from Berkshire’s big Treasury holdings and other cash and cash equivalents.
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Berkshire’s overall earnings including investment gains more than doubled in the second quarter to $25.7 billion, reflecting mostly paper gains on the company’s equity portfolio.

The company tells investors to focus on operating profits excluding the gains rather than the total figure, which can be distorted by one-time paper gains and losses in Berkshire’s equity portfolio.

Man gets award from police for aiding in arrest of suspected thief on flight to Singapore


Silas Wong receiving the Public Spiritedness Award from Assistant Commissioner of Police M. Malathi on Aug 7.PHOTO: SINGAPORE POLICE FORCE

Published Aug 07, 2026, 09:32 PMUpdated Aug 07, 2026, 09:45 PM

SINGAPORE - Silas Wong was on a flight to Singapore on Aug 6 when he noticed another passenger’s suspicious behaviour.

According to a statement by the police on Aug 7, the suspect allegedly removed another person’s backpack from the overhead compartment and looked through its contents.

The backpack was later returned to the compartment without the owner’s knowledge.

After the aircraft landed at Changi Airport, Wong found the owner of the backpack and told him what he had seen, said the police.

The victim discovered €250 (S$370) missing from his backpack. Wong reported the theft to the police, who were alerted at 11.20pm on Aug 6.

The man was later identified and arrested by officers from the Airport Police Division, said the police in their statement.

The 60-year-old is set to be charged on Aug 8 with theft. If found guilty, he may be jailed for up to three years, fined, or both.

For his assistance, Wong was presented with the Public Spiritedness Award on Aug 7.

Assistant Commissioner of Police M. Malathi, commander of the Airport Police Division, said: “I commend Mr Wong for his keen observation and willingness to step forward, which were instrumental in the swift detection of the alleged crime...

“His actions are exemplary and serve as an encouragement for others to remain vigilant and help ensure a safer air travel for everyone.”

Wendy’s Slashes Dividend and Scraps Guidance as Activist Peltz Applies the Pressure
By Mackenzie Tatananni

Updated Aug 07, 2026 1:14 pm EDT / Original Aug 07, 2026 7:49 am EDT

https://www.barrons.com/articles/wendys-earnings-dividend-stock-price-84214acb

Wendy’s pulled its annual guidance and cut its dividend, citing falling traffic.

Key Points

- Wendy’s pulled its full-year outlook and cut its annual dividend to 28 cents a share, citing declining customer traffic.

- Wendy’s second-quarter U.S. same-restaurant sales fell 7%, which was worse than the 4.7% decline Wall Street expected.

- CEO Bob Wright is formulating a turnaround plan as Wendy’s faces pressure from activist investor Nelson Peltz.

Wendy’s pulled its full-year outlook on Friday and cut its annual dividend, citing declining customer traffic and shrinking franchisee profits.

Wendy’s slashed its annual dividend payout to 28 cents a share, amounting to 7 cents a share each quarter, down from 14 cents. The fast food chain said its leadership was formulating a turnaround plan “including the optimal deployment of capital.”

CEO Bob Wright, who was elevated to the company’s top role in May, said the company had identified five areas to drive the turnaround including rebuilding menus and improving the chain’s marketing. “Today we are clearly not performing at our potential,” Wright said.

The updates came as Wendy’s reported a 7% decline in U.S. same-restaurant sales for the second quarter, driving a 6.5% drop in systemwide sales. Wall Street had expected a milder 4.7% decrease.

Shares climbed 3.6% on Friday as the benchmark S&P 500 index added 0.5%. The stock was regaining ground following a sharp selloff on Thursday that saw shares fall 7.5% in the absence of obvious news.

The second-quarter numbers beat expectations by a hair. Wendy’s posted adjusted earnings of 18 cents a share, ahead of analyst calls for 16 cents. Revenue ticked up 1.7% in the quarter to $570.6 million, narrowly beating Wall Street’s forecast of $557.1 million.

The commentary surrounding the report is the latest sign of the fast-food chain’s deepening woes. Wright, the company’s former chief operating officer, departed in 2019 to lead Potbelly Sandwich Works through its postpandemic recovery. He was appointed CEO of Wendy’s in May, ending a nearly year-long executive search.

Wendy’s first teased a turnaround at the end of 2025, when it pledged to shutter around 300 of its underperforming U.S. restaurants. By the end of the first quarter, Wendy’s reported a net loss of 174 restaurants as part of its ongoing restructuring.

The company also has faced pressure from activist investor Nelson Peltz, who noted in a securities filing in February that Wendy’s stock was undervalued.

His investment firm, Trian Partners, first bought into Wendy’s in 2005 and spearheaded major changes including the spinoff of Tim Hortons into a stand-alone public company.

In 2008, Peltz’s holding company, Triarc Cos., acquired Wendy’s in a $2.34 billion, all-stock deal and subsequently adopted the Wendy’s name.

Peltz and Trian Partners hold a combined stake of over 24% in Wendy’s today, making them the largest shareholder. Peltz personally owns roughly 16%, while Trian holds 7.9%.

The billionaire has disclosed ongoing discussions with Wendy’s leadership and shareholders regarding strategic transactions, saying he is exploring options to enhance shareholder value, which could include increasing his stake.

Wendy’s management didn’t acknowledge the activist campaign on the earnings call Friday, though CEO Wright acknowledged execution had faltered.

“When you have a strong brand and you have a strong culture, you have the opportunity to do something really special. It becomes a performance issue, and that’s what we’re facing,” Wright said.

Management attributed the drop in foot traffic in the latest quarter to less discounting and the elimination of breakfast options at certain locations. But the issues run deeper, as Wendy’s grapples with consumer budget constraints, rising costs, and other issues facing the restaurant industry at large.

Wendy’s shares have trailed behind the broader market this year, falling over 10% in 2026. The S&P 500 has gained 13% over the same period.

Social media hype sent the stock sharply higher in late June, briefly framing Wendy’s as the next meme stock in the vein of GameStop and AMC Entertainment. That momentum didn’t last, however, and fundamental problems persist, including a multi-quarter sales slump.

“Over time, we’ve drifted away from some of the standards that made Wendy’s distinctive,” Chief Financial Officer Steve Cirulis told analysts on Friday. “While we’ve maintained core practices in some areas, we’ve let cost and efficiency drive decisions that weaken that differentiation on value.”

Management refrained from providing a forecast, but Cirulis indicated that July traffic trends mirrored those of the second quarter. Consequently, “continued traffic headwinds” are expected to stall year-over-year systemwide sales growth through the remainder of the year, Cirulis said.

It remains to be seen whether the company’s new CEO can leverage his turnaround experience, or if Peltz’s intervention will bear fruit, but one thing is clear: Wendy’s is under pressure.

Why Citigroup Preferred’s Juicy 10% Yield May Not Last Much Longer
By Andrew Bary

https://www.barrons.com/articles/citigroup-preferred-stock-yield-redeem-739ee7ff

Updated Aug 07, 2026 3:13 pm EDT / Original Aug 07, 2026 11:06 am EDT

Citigroup Capital XIII 7.875% Trust Preferred Securities are traded on the NYSE under the ticker symbol C Pr N.

Key Points

The price of a $2.2 billion Citigroup preferred stock issue has fallen recently amid investor concerns that the bank will redeem it.

Investors worry Citigroup will redeem the shares at their $25 face value, causing losses for those who paid a premium for the high yield.

Citigroup has kept the issue outstanding because a redemption would result in an accounting loss.

An unusual Citigroup preferred stock issue seemed to be too good to be true, with a yield around 10% for the past several years when most big-bank preferreds were offering 6% to 7%.

The bounty could be coming to an end. The price of the $2.2 billion Citigroup preferred issue has fallen recently amid investor concerns the bank will redeem it.

The Citigroup Capital XIII 7.875% Trust Preferred Securities, which are traded on the NYSE under the ticker symbol C Pr N, ended Thursday at $26.25 a share, down 1.4% in the session and at a new 52-week low. The shares traded around $29 a month ago and at $30 earlier this year.

The shares were trading at $26.375 on Friday morning, up 0.5% on the session.

The face value of the Citigroup preferred stock is $25 a share, like those on many preferred issues,and matures in 2040. The company can redeem the shares at $25. The current yield is now about 10% with the rate adjusting quarterly at 6.63 percentage points above SOFR, the short-term rate benchmark now around 3.65%.

Investors were willing to pay a premium price above $25 a share for the Citigroup preferred to get the high yield, figuring the bank wouldn’t redeem it.
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The Citi issue is a special type of preferred known astrust preferred securities, or Trups. The Citi Trups were issued to the federal government in the wake of the financial crisis, and Treasury then sold them into the public markets in 2010.

Citigroup declined to comment on its intentions, but investors may be focusing on a comment from CFO Gonzalo Luchetti on the earnings conference call in July that the bank would look at “structural funding opportunities.”

That’s admittedly a little vague, but investors sense Citigroup could soon move to redeem the preferred at $25, and potentially replace it with lower-cost financing. This would result in losses to investors who paid more than $25 a share.
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Why has Citigroup left this preferred stock issue outstanding for so long and given investors such a high yield? As Barron’s noted in April 2024 article, Citi would have to take an accounting loss on a redemption.

Due to a quirk in accounting rules, the preferred is carried on Citi’s balance sheet for about $1.6 billion, not the face value of $2.2 billion. A redemption at the face value of $25 would result in a loss of about $600 million, Barron’s estimates. Citi also gets favorable capital treatment for the preferred.

“As we’ve stated in the past, due to this grandfathered security’s carrying value on the balance sheet, it’s more attractive economically to leave it outstanding rather than to call it at this time,” Citi said in a statement included in our 2024 article. “We continue to assess this on an ongoing basis.”

Citi also gets some tax benefits from the trust preferred because it is technically debt, and the dividend costs are deductible, unlike regular preferred, which is a senior form of equity and whose dividends are paid with after-tax earnings.
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Citi pays interest on subordinated debt issued to the trust, called Citi Capital XIII, which then passes on the payments to investors. This benefits Citi since the interest payments are tax deductible, unlike preferred stock dividends.

Investors get no tax break on the Citi trust preferred dividends, unlike those on most regular preferreds, which are taxed preferentially at a 20% federal rate like dividends on common stock. Preferred stock is form of equity.

The current effective cost of the trust preferred is closer to 7.5%, based on Citi’s tax rate of about 25%. That’s above a 6.25% rate on Citi preferred. But Citigroup likely could offer debt at 5% to 6% to pay off the preferred or use cash on hand.
This Citigroup preferred has offered an outsize yield, but like many good things, it may not last.

Berkshire’s Buybacks and 2 More Big Things in Its Earnings Report

By Andrew Bary

Aug 06, 2026, 1:15 am EDT

https://www.barrons.com/articles/berkshire-hathaway-earnings-stock-price-7454a7d3

Key Points

• A July filing by Chairman Warren Buffett indicated Berkshire Hathaway repurchased $5 billion to $11 billion of stock in the second quarter.
• Wall Street expects Berkshire Hathaway’s second-quarter earnings to fall by about 3% to $7,553 per Class A share.
• Berkshire Hathaway surprised Wall Street by purchasing $10 billion of Alphabet stock in June.

Berkshire Hathaway’s stock repurchase activity could be the most important figure in the company’s second-quarter earnings report that should come Saturday.

A July securities filing by 95-year-old Chairman Warren Buffett indicated that Berkshire repurchased from $5 billion to $11 billion of stock in the second quarter.

That would be way above the $235 million in the first quarter, which was the first time the company bought back stock since May 2024. The more buybacks in the period, the more bullish for the stock.

Big buybacks probably would cheer up investors given that the stock’s nearly 3% gain this year is far behind the S&P 500’s roughly 14% total return. Shares also are trailing those of companies in similar industries like Union Pacific, Chubb, and NextEra Energy.

On Wednesday, Berkshire’s Class A shares closed up 0.6% at $777,696 and the Class B shares ended at $518.85, up 0.3%.

Berkshire hasn’t said its results will be out on Saturday, but that should be the day based on the history of its second-quarter profit releases. The company usually discloses the date a few days before the release.

https://preview.redd.it/relhimd6lphh1.png?width=1370&format=png&auto=webp&s=288cfc3410ddf961d6697b7ae92ce7e2deeef30a

Wall Street expects Berkshire’s earnings to fall by about 3% to $7,553 per Class A share and to about $5 per Class B share, according to FactSet.

UBS analyst Brian Meredith, though, sees just the opposite—and he has a good record of predicting results.

Meredith is projecting a 3% gain—almost $8,000 per Class A share and to $5.32 per Class B share—driven by buybacks; higher earnings at BNSF, the railroad unit; and lower catastrophe losses at Berkshire’s big property and casualty insurance businesses.

Investors often don’t react much to Berkshire’s quarterly numbers, preferring to look at profits over longer periods. But they do pay attention to the reports. They’ll probably look at Berkshire’s Geico auto insurance unit, including revenue growth and underwriting profits. And they’ll certainly be interested in BNSF relative to its chief rival, the more profitable Union Pacific, which reported a 12% increase in adjusted second-quarter earnings.

Wall Street also will be focused on Berkshire’s investment activity and cash levels. The company surprised Wall Street when it bought $10 billion of Alphabet stock in June at below $350 a share as part of the search giant’s $85 billion equity capital raise. Alphabet shares are now close to $360.

The second-quarter 10-Q filing probably will be released on Saturday as well. It will lay out the size of Berkshire’s equity purchases and sales, but probably not detail individual securities.

Those names will come in Berkshire’s 13-F report, which is expected on Aug. 14.

Berkshire was active in the first quarter, buying $16 billion of stocks and selling $24 billion. It unloaded positions from former investment manager Todd Combs, who left in December for an investment post at JPMorgan.

The company’s cash and equivalents hit a record $374 billion in the first quarter—adjusting for the timing of some Treasury bill purchases and excluding cash at the railroad and utility businesses. The second-quarter cash figure could be lower because of the Alphabet purchase.

On buybacks, many investors would like Berkshire to be more aggressive given the stock’s reasonable valuation of about 1.4 times current book value—at the lower end of the range in recent years—and to deploy its huge amount of cash. The current price/book ratio is a Barron’s estimate based on the equity portfolio’s performance so far this quarter.

Berkshire is valued at $1.1 trillion and probably is capable of buying $50 billion of stocks annually, about double its record annual total in 2021, based on trading volume in the stock.

Buffett’s July filing disclosed that he held 13.2% of Berkshire stock. Barron’s then calculated a range of potential repurchase activity in the second quarter and into early July based on implied share count on July 14 relative to the first-quarter total.

Berkshire isn’t expected to hold an earnings call, a practice that started under Buffett when he was CEO and is being carried on by his successor Greg Abel.

For new CEO Abel, earnings calls don’t align with his focus on long-term performance.

Barron’s has argued Abel’s policy is bad for investors—because they deserve to hear from management on investments and to get greater insight into Berkshire’s many operating businesses.