TIP717: Berkshire Hathaway 2025 w/ Chris Bloomstran

Key takeaways

Trust is foundational in investment management, influencing relationships with clients and overall business integrity.
Investors need to be realistic about expected returns, with treasury bonds currently appealing compared to the S&P 500.
Berkshire Hathaway's intrinsic value is expected to grow, but future returns for investors may be more conservative than historical averages.
Teaching and sharing knowledge with the investment community is important for leaders, who should remain lifelong learners.
Active engagement in corporate governance can enhance performance, but it must align with Berkshire's core values of trust and integrity.

Summary

The Importance of Trust in Investing

Chris Bloomstran emphasizes the significance of trust in investment management, reflecting on lessons learned from Warren Buffett. The discussion delves into how trust affects relationships with clients and the importance of being a steward of capital. Buffett's relationships with his family and shareholders are highlighted, underscoring the emotional aspects of trust in one’s professional life.

Market Analysis and Investment Strategy

A focus on current market conditions reveals Bloomstran’s perspectives on the S&P 500 and treasury investments. He argues that investors expecting high returns from the S&P might face challenges, suggesting that a 10-year treasury may be a safer option. The conversation examines how market cycles influence investment decisions and profitability, with references to historical valuations and future expectations.

Berkshire Hathaway’s Performance and Future Outlook

The podcast discusses Berkshire Hathaway's intrinsic value and expected returns in the coming years. Bloomstran provides insights into Berkshire’s business model and investments, noting that current valuations may lead to a more conservative outlook of 8-9% returns in the next decade. He reflects on the challenges of predicting future performance amidst rising costs and market fluctuations.

Philosophy of Investing and Legacy

Upon reflection of his investing philosophy, Bloomstran shares his commitment to educating others in the investment community. He discusses his annual letters and contributions to teaching value investing. Furthermore, he considers the impact of legendary figures like Buffett and Munger on the investment world and how their legacies will continue to influence future investors.

Berkshire Hathaway and Corporate Governance

The episode touches on the role of Berkshire Hathaway in corporate governance and the importance of active engagement with portfolio companies. Bloomstran discusses how Berkshire should balance its influence without compromising its principles, highlighting the practices that resonate with its culture of integrity and long-term thinking.

Show notes

Stig has invited legend investor Chris Bloomstran from Semper Augustus to teach us how to value Berkshire Hathaway on today's show. Semper Augustus has an outstanding track record with a compounded annual growth rate of 11.4% on equities since its fund's inception on 2/28/1999, compared to 8.2% for the S&P 500.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

01:45 - The importance of being trusted for Warren Buffett and Chris Bloomstran

18:20 - Why you may want to own a 10-year treasury over the S&P 500 over the next decade

20:28 - How to estimate whether you’re in a secular peak

27:43 - How active Berkshire should be on the boards of portfolio companies

36:03 - How to take a deep dive into Berkshire Hathaway’s culture and business model

43:53 - What the intrinsic value of Berkshire Hathaway is, and what type of return you can get moving forward

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join Clay and a select group of passionate value investors for a retreat in Big Sky, Montana. Learn more here.

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.

Stig’s 2024 interview with Chris Bloomstran about Berkshire Hathaway.

Stig’s 2023 interview with Chris Bloomstran about Berkshire Hathaway.

Stig’s 2022 masterclass with Chris Bloomstran on valuing Berkshire Hathaway.

Chris Bloomstran’s website.

Read Chris Bloomstran’s annual letters.

Buffett resource on CNBC.

Alex Morris’ book, Buffett and Munger Unscripted – read reviews of the book.

Check out all the books mentioned and discussed in our podcast episodes here.

Enjoy ad-free episodes when you subscribe to our Premium Feed.

NEW TO THE SHOW?

Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter.

Check out our We Study Billionaires Starter Packs.

Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok.

Browse through all our episodes (complete with transcripts) here.

Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.

Enjoy exclusive perks from our favorite Apps and Services.

Learn how to better start, manage, and grow your business with the best business podcasts.

SPONSORS

Support our free podcast by supporting our sponsors:

Plus500

Netsuite

Shopify

Vanta

HELP US OUT!

Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!

Support our show by becoming a premium member! https://premium.theinvestorspodcast.com/