Berkshire Hathaway Inc. (BRK.B), Bank of America Corp (BAC): Invest with Buffett

We can count on Buffett’s book value to be an understatement of the real worth of his businesses. When I first bought stock in Berkshire Hathaway Inc. (NYSE:BRK.B), I received “An Owners Manual,” which described Buffett’s view that intrinsic value is the “only logical approach to evaluating the attractiveness of investments and business.” He states that Intrinsic value “is the discounted value of the cash that can be taken out of a business during its remaining life.” Book value for a business is assets minus liabilities.

“Our March 31, 1996, book value of $15,180 far understates Berkshire Hathaway Inc. (NYSE:BRK.B)’s intrinsic value, a point true because many of the businesses we control are worth much more than their carrying value,” Buffett wrote.

Book value has grown over 19.7% annually through 2012 since Buffett took over the company in 1965, but I believe the company’s true worth is far more than the current stock price. Book value on June 30 was $122,899.

Conclusion
I would not recommend you drain all your bank accounts in order to buy the stock. However, if there is one stock to own for the long-term, it is Berkshire Hathaway Inc. (NYSE:BRK.B). There is no company in the world quite like it. Prospect going forward are still good. Investors stand to benefit from Buffett’s lifetime of acquiring great businesses.

Many of these businesses are carried on the books at a discount to their intrinsic value. I expect earnings to continue to grow as the economy improves.

The article Avoid Investor Regret: Invest with Buffett originally appeared on Fool.com.

Michael Hooper owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway and Markel. The Motley Fool owns shares of Berkshire Hathaway and Markel. 

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