1996: Would Berkshire repurchase shares if it was undervalued?

AUDIENCE MEMBER: Henry Neuhoff (PH), shareholder, Dallas, Texas.

My guess is that you consider the intrinsic value of the shares to be more than that represented by the price.

WARREN BUFFETT: By more than represented by what?

AUDIENCE MEMBER: More than represented by the current price of the shares.

If that be the case, what would be your thoughts about Berkshire repurchasing its own shares?

WARREN BUFFETT: Yeah, no. We have said we do not consider Berkshire undervalued at this price. We didn’t say we thought it was overvalued. But we said we did not consider it undervalued.

So, a repurchase based on our estimate would not be in the interests of shareholders.

It’s conceivable it could be at some time, but we do not think that’s the case. We think intrinsic value far exceeds book value, but we do not think it exceeds present price.

We’re not selling any shares, though, either. (Laughter)

(Break in tape)

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