Just a quick note that this morning a limit order that I’ve had sitting in my account for a while triggered, and as a result I boosted my holdings in Berkshire Hathaway by about 20% (yes, I’m a small investor so these are the B shares — BRK.B in most quote systems). The company is obviously subject to the cycles of the economy with their construction materials and railroad subsidiaries, among others, but under Buffett’s leadership they’ve also proven that they can take advantage of weak economic times and stock downturns to make great deals for their shareholders. I don’t know whether the mid-$60s are a “bottom” in the stock near term, but it’s a price I’m happy to pay for a company that I think is still undervalued.

Part of that undervaluation, I think, is Buffett himself and the fear that his eventual departure will sink the shares — I have no idea whether or not he’ll put in another decade at Berkshire Hathaway, he’s clearly preparing for successors on the investment side of the business with new hedge fund managers brought in to handle some of Berkshire’s prodigious cash flow … but he’s equally clearly still very energetic and unlikely to retire while he’s still got a full bag of marbles. The assets Berkshire owns, and their exceptionally managed insurance operations that bring in cheap cash for them to invest, are a fine place to put my money right now even if the management of the future is not as revered as the current CEO.

I don’t know if they’ll double from here, but I do think they’re worth more than $65 and I think the attention on Buffett takes away from Berkshire’s huge, diversified and well-managed constellation of subsidiaries. The current price is almost exactly at book value — not Buffett’s preferred “intrinsic value,” which has always been substantially higher than book value, but actual accounting book value … that’s partly due to the big acquisitions of Lubrizol and Burlington Northern, but it’s still notable — I don’t think I’ve seen Berkshire trade at book value in the many years I’ve owned the shares, and the cottage industry of folks who try to figure out the “intrinsic value” of Berkshire shares is probably agog at these prices. Other insurance conglomerates sometimes trade at steep discounts to book value, but Berkshire doesn’t — I ...