QS Research · Michael Burry's Scion Capital analyst template · 2006
BERKSHIRE HATHAWAY INC (BRK.B)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case -2% · downside -25% · upside +15%
Section 13's base is TTM net income of $85.77B (N11) on $747.91B equity (N17) and 11.5% ROE (N18); at the only usable quote, the class-A cap of $1,222.63B equals 14.3x TTM earnings (S1). The 12-16x band gives $1,029B-$1,372B, with a 14x midpoint of $1,201B, roughly -2% from today; 10x downside is $857.7B (-30%) and 1.3x book is $972.3B (-20%), so I use -25%, while 16-17x gives $1,372B-$1,458B (+12% to +19%), so I use +15%. The TTM net income is not clean operating earnings—Q2 2026 net earnings included $12.684B of investment gains versus $12.983B of operating earnings—so the 1.6x book and 11.5% ROE cross-check matters more than a headline multiple (S28). The market is not missing a collapsed business: float is ~$176B, statutory surplus ~$333B, and non-insurance units grew, but the stock is near its 52-week high and already capitalizes that strength (S22, S23, S28, N2). With base near flat, downside at best -25% and no +30% margin of safety, the rule leaves a pass rather than a long or short.
Key numbers
- Share price: $571.43
- Market cap: $538.0M
- Latest financial period: TTM to Jun 30, 2026
- Revenue (TTM): $384.69B
- P/E (TTM): 0.0x
- Price / book: 0.00x
The 15 boxes
- ✓ 1. Long-form business notes
Berkshire is a decentralized holding company whose core engines are insurance (GEICO, BH Primary, the Berkshire Hathaway Reinsurance Group), BNSF freight rail and Berkshire Hathaway Energy, plus many smaller manufacturing, service and retail businesses. FY2025 revenue was $247.24B with net income of $66.97B and equity of $717.42B, against FY2021 revenue of $191.25B and net income of $89.94B. The balance sheet inside the insurance operation got much larger over the window: combined statutory surplus of the U.S. insurers rose from about $237B at 12/31/2020 to about $333B at 12/31/2025, and float from about $138B to about $176B. Net income is volatile year to year (FY2022 was a loss of $22.76B) because the asset side is a very large, unusually concentrated public equity portfolio, not because underwriting is reliably profitable.
- ✓ 2. Competitive advantage
The sources show two concrete advantages: insurance statutory surplus and BHE's regulated utility and pipeline scale. They also show BNSF in a highly competitive freight market and warn that every operating business faces intense competition and that advantages can erode. The FY2021-FY2025 record shows large scale and equity growth but volatile net income, including a FY2022 net loss, so it does not by itself prove durable excess returns.
- ✓ 3. 10-Q takeaways
Q2 2026 net earnings attributable to Berkshire shareholders were $25.667B versus $12.370B in Q2 2025, but the increase was dominated by $12.684B of investment gains, not operating earnings. Operating trends were mixed: insurance underwriting and insurance investment income fell, while BNSF, BHE, and manufacturing/service/retailing rose. Cash and investments were large ($553.316B at June 30, 2026) and float was $177.5B; the 10-Q gives no quantitative guidance and Item 1A adds no new specific risk factors.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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