How Much Will You Make From Buying BRK? - Berkshire BRK Stock Analysis

Value Investing with Sven Carlin, Ph.D.•Jun 8, 2026

Summary

Sven discusses the evolving investment strategy of Berkshire Hathaway, particularly in light of its substantial cash reserves. He highlights that Warren Buffett's historical approach of earning 5% on short-term treasuries is no longer viable, as rates have dropped to 3.7% while inflation rises, making cash a diminishing asset due to purchasing power decline. This shift forces Berkshire to be more active in deploying its capital.

**Berkshire Hathaway (BRK.B/A):** Sven has been dollar-cost averaging into Berkshire Hathaway since last year, despite being down 5%. He considers it a very safe, long-term investment. He argues that while it's unrealistic to expect Buffett's historical 15-20% returns due to Berkshire's immense size and current market conditions, a 6-8% return is achievable and very good, outperforming 98% of other investments. He projects Berkshire's market capitalization could reach 2 to 5 trillion by 2046, assuming a 7.2% growth rate and a P/E ratio between 10-12. He views it as a "buy and forget" stock that offers better returns and inflation protection than the S&P 500 if its cash is strategically deployed. For valuation, he uses an intrinsic value model, with a conservative P/E ratio of 20 for future expectations, and suggests that with cash deployed, the bottom intrinsic value might be around $750-$800 billion.

**Google (GOOGL/GOOG):** Sven notes Berkshire's recent purchase of Google, which now constitutes 7% of its stock market portfolio. He explains this decision by stating that a P/E ratio of 27 for a growing company like Google is a more attractive investment than holding cash, which is losing value to inflation and yielding only 3.7% in treasuries. He implies that this move, likely orchestrated by Greg Abel, is part of a broader strategy to actively invest Berkshire's cash pile into assets that can deliver growth and combat inflation.

Sven concludes that while Greg Abel may not replicate Warren and Charlie's legacy, he will likely manage Berkshire well, adapting to market changes, as the company has historically done. He emphasizes that for most investors, Berkshire remains a superior "buy and forget" option compared to the broader market.

Mentioned Stocks

GOOG

Sentiment: BUY

Reasoning: Sven discusses Berkshire Hathaway's purchase of Google, which now makes up 7% of its stock market portfolio. He justifies this move by arguing that a P/E ratio of 27 for a growing company like Google is a better investment than holding cash, which yields only 3.7% in treasuries and is being eroded by inflation. This purchase is seen as a strategic deployment of Berkshire's substantial cash reserves to gain exposure to growth and hedge against inflation.

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BRK.B

Sentiment: BUYAction: BOUGHT

Reasoning: Sven explicitly states he has been "dollar cost averaging into Birkshshire since last year" and views it as a very safe long-term investment, expecting a 6-8% return. He argues that this return is superior to 98% of other investments and even the S&P 500 for a "buy and forget" strategy, especially given its potential for inflation protection through cash deployment. He projects a market cap of 2 to 5 trillion by 2046 assuming 7.2% growth and a P/E ratio of 10-12. He also mentions an intrinsic value model, suggesting that with cash deployed in good opportunities, the bottom intrinsic value might be $750-$800 billion.

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