 But they fell investors at current prices. Berkshire Hathaway is offering a 10% investment return over infinity and perhaps even more. So that's all you need to know about investing. Subscribe to this channel, click that notification bell to get notified when a new video comes out. Or don't, I just told you everything you need to know about investing. No, no, subscribe because on this channel I'll keep reminding you what is important. So when it comes to Berkshire, it is all about the business, the long-term return, the long-term earnings of that business which we're going to discuss. We're going to discuss why Berkshire stock is down. Perhaps some people are betting against America which is something Warren says never to do. And now, okay, the stock price is volatile, rebounded. We'll discuss that too. Then we'll discuss really the fundamentals of the business, the likelihood of going bankrupt or losing a lot of money in whatever crisis comes, the fact that Berkshire is a fortress and what might be the main point that the market is missing when it comes to Berkshire. Let's start with Berkshire stock analysis. If we look at the stock price, this was the day when I started writing this so the stock price was down to 240,000. Why is Berkshire stock down? Well, the baby is thrown out with the bet water in this case. Then it's rebounded. Yesterday I'm filming this before the market opens today. You'll see this video after the market closes. But okay, really huge volatility. Nevertheless, as investors, we still focus on fundamentals but discussing the drop which is still down a lot. This is the drop. So the stock market sold everything. Warren's holdings of stocks are down 80 billion, now a little bit less, what 70 billion and therefore also the stock price of Berkshire gets hit as everything is being sold. Now, if we look at the portfolio that Berkshire owns of the stocks, just the stock market portfolio, it was at the end of 2019 around 248 billion, 80, 70 billion down and you are at 170 and consequently also the stock price of Berkshire. False, this was till March 23. Now this already looks different because a lot of the stocks went up but all the holdings, all of Berkshire's holdings were hit significantly. And then especially the news focus on single names that are hit more or that and that creates a negative scenario in the market and people simply sell off, especially because they are in fear that it will go cheaper and that they will lose more. But that's not investing, that's stock price speculation and that never leads to anything and that's the message Warren Buffett has been telling us since ever. What is the key are the fundamentals and the long-term business earnings which we are going to discuss now and you'll see why Berkshire is a great investment especially at these levels. So let's start with the stock portfolio. These are the top 10, only the top 10 holdings for Berkshire and they got in 2019, 3.7 billion in dividends from those businesses. However, the earnings that the businesses retained were another 8.3 billion. So if we look at those 8.3 billion that's something we have to add to Berkshire's returns on investment, Berkshire's earnings but that's not added because that is accounting and that is not shown in Berkshire's accounting because Berkshire doesn't own the majority of those businesses. So when you own just some between 20% that's just accounted for the dividend that comes in and not for the retained earnings which is again an advantage that Berkshire offers. On top of the stock market portfolio you have the portfolio of completely owned businesses that includes insurance, railroad, utilities and energy, manufacturing service and retailing a whole bunch of businesses that Berkshire owns and then also in the accounting investment and derivative gains and losses that depends on the stock price fluctuations that's not included in real earnings. Nevertheless, when I add the earnings of the owned businesses which was 23.3 billion in 2019 then the total earnings of Berkshire add up to 31.6 billion. This is what the business earned in 2019. So on a market capitalization of I had to readjust everything in a day of 447 billion, that's a price earnings ratio of 14 was 12 yesterday when I started preparing this for a business return of 7.23% was 8% yesterday. However, if we look at the fact that Berkshire also has 100 billion in cash, 24 billion let's say is for insurance calamities that Buffett always wants to have as cash. We have another 100 billion so the real market capitalization minus the free cash that Berkshire has is now 347 billion. With 31.6 billion in earnings that's a price earnings ratio of 10 approximately 10 was nine yesterday. So that leads you to a business return of 10% long term. And when I put this, I started on my stock market research platform I started updating all my holdings all the stocks that I have ever analyzed and here you see a comparison with Berkshire and food stocks and I was looking at the business yield and business yield of Berkshire was yesterday 11.15% now it's down to 10% no risk. So it was the best return compared to other businesses especially as Berkshire is a financial fortress and therefore I estimate there is no risk. If you want to check all that I do if you want to see this table how it develops over time perhaps find some interesting investments check my stock market research platform in the links below. Now what's the outlook for growth for Berkshire? Well, when it comes to Berkshire the 100 billion have been there waiting for opportunities. As said in the recent letter to shareholders Buffett said if you want to sell more than 20 million of Berkshire stock give me a call I will buy so he was already happy doing buybacks two months ago. So he must be extremely happy buying back Berkshire's stock as much as he can. I think he can buy a third of daily volume now. So that's deploying the cash into a business that gives you 10% which means that that 100 billion dollars gives you protection, gives you a cash buffer and you know that Buffett is going to reinvest it at 10%, eight, nine, 10% and something that will grow into infinity. So he always says be fearful when others are greedy be greedy when others are fearful and now the last month others have been fearful and it's time to be greedy new investments return on capital of 10% and higher of course looking for growth into infinity. What is the bankruptcy likelihood related to the current situation? I don't think there is any likelihood because if we go to the 2018 annual letter we see that Berkshire will forever remain a financial fortress and he will never risk getting caught short of cash and in the years ahead, perhaps 2020 we hope to move much of our excess liquidity just 100 billion into businesses that Berkshire will permanently own. The immediate prospects for that however are not good now they are much better. Prices are sky high for businesses possessing decent long-term prospects. So now he might have deployed part of it probably this situation will last still a while so we'll see how he deployed that money but that's also a cash hedge that you have when you invest in Berkshire. So what's the market missing long term is the long-term growth of Berkshire it's likely that Berkshire will grow forever because as the global economy grows the great businesses Berkshire owns will continually grow. When there is trouble in the markets let's say in insurance it helps that you have 120 billion to recapitalize, grow your market share so that's again an opportunity for Berkshire. In Chinese words risk means or crisis means both risk and opportunity. So when you look at Berkshire think opportunity. Burlington North and Santa Fe bought in 2009 opportunity or 2008 what it was so when situations like this come that's an opportunity that increases exponentially Berkshire's earnings over the long term. So we are now at 10% with no risk from a business perspective. However, interest rates have been lowered down which means money is free and if we put that into a perspective evaluation perspective if I compare Berkshire's business return of 10% with zero interest rates what does that mean from an investing perspective? It means that we could soon see Berkshire giving a 3% yield which would be a great yield relative which means that it's a triple ahead for Berkshire stock. It wouldn't be a surprise to see Berkshire at 1 trillion, sorry trillions I have to start talking in trillions. 20 years ago it was millions then learning billions now trillions. 1 trillion, 1.5 trillion dollars so there is the possibility given the zero interest rate environment that stocks are really really cheap and that we are looking at bargains of a lifetime especially because no risk businesses like Berkshire can easily triple. We don't know what is ahead but we have a triple if not we have a business yielding long term 10% when the economy stabilizes. Of course earnings are going to get hit this year but in 2021, 2022 they will likely rebound because those are good businesses and businesses that will take advantage of the situation. So when it comes to me I'm looking at 15% and higher returns so I'm comparing Berkshire to all my other holdings and therefore I'll see if it hits 15% if we are in such a situation that the stock continues to decline I'll really consider also buying Berkshire for my portfolios. Thank you for watching. Looking forward to your comments. Subscribe, click that notification bell and I'll see you in the next video.