Not-ready-for-prime-time e-mail to a reader yesterday:Today, over at Investopedia:
Know who is going to make a killing on the new tax plan?
Warren Buffett.
In fact, Berkshire may be the biggest winner overall from the Trump tax cut, per Barron's, quite ironic given that Buffett was one of the president's most vocal critics during the 2016 campaign.Disclaimer: this is not an investment site. Do not make any investment, financial, job, relationship, or travel decisions based on anything you read here or think you may have read here.
he corporate tax cuts recently signed into law by President Trump, coupled with gains in Berkshire's equity investments and strong results from its operating divisions, could give Berkshire's book value a 13% boost in the fourth quarter, Barron's estimates.
Berkshire's outlook for 2018 is bright, Barron's adds, with a combination of solid economic fundamentals and a reduced federal income tax rate leading them to estimate that 2018 EPS easily will surpass $12,000 per class A share.
Given Thursday's close of $299,210 per share, that implies a forward P/E ratio of 24.9. Additionally, Barron's projects that Berkshire's book value per share will end the fourth quarter at about $211,000, giving it a price to book ratio of 1.4.
For investors, 2017 was an incredibly good year. It's hard to believe that 2018 could be any better, but with:
a) the tax cuts; and,it's possible.
b) the infrastructure bill
Speaking of Berkshire, one year ago, BRK-B, $163.83. Today, $198.22.
- 198.22 - 163.83 = 34.39
- 34.39/163.83 = 21%.
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