Berkshire Hathaway's intrinsic value is nearly $1.25 trillion and is poised to grow 10-12% annually, making it an attractive long-term investment.
The S&P 500 is dangerously overvalued, trading at a high multiple on peak, unsustainable profit margins, suggesting significant downside risk.
The massive, multi-trillion-dollar investment in AI CapEx is a bubble-like phenomenon that will compress the profit margins of even the largest tech companies due to poor returns on capital.
Aggregate share buybacks by S&P 500 companies have been largely ineffective at creating shareholder value over the long term, as evidenced by a rising aggregate share count over 25 years.
Greg Abel is actively and capably assuming leadership at Berkshire Hathaway, demonstrated by his strategic initiation of share repurchases and his preparedness to deploy massive capital during the next market crisis.
1964-Present
References Berkshire Hathaway's long-term performance, noting a $100 investment in 1964 would have compounded at 19.7% annually to become $6.1 million over 61 years.
Last 25 Years
Analyzes a period where S&P 500 companies spent over half their profits on buybacks, yet the aggregate share count grew by 1.8%, a key point in his critique of capital allocation.
2021
Identifies 2021 as the year S&P 500 profit margins hit a peak of 13.3%, a historical high he uses as a benchmark for current market valuation.
2024
Notes that Greg Abel initiated share repurchases for Berkshire Hathaway after the stock declined post-earnings, signaling Abel's active management style.
Next 5-6 Years
Projects that cumulative spending on AI CapEx will reach $3 trillion or more, forming the basis of his thesis on margin compression for big tech.
Next 10-15 Years
Predicts that Berkshire Hathaway's intrinsic value will grow annually on average between 10% and 12%, indicating his long-term bullish outlook on the company.
▶Berkshire Hathaway Intrinsic Value and FutureJun 2026
Bloomstran provides a deep, quantitative analysis of Berkshire Hathaway's value, calculating its intrinsic worth at nearly $1.25 trillion. He projects a 10-12% annual growth in this value over the next decade and shows confidence in Greg Abel's leadership, particularly his future role in deploying hundreds of billions in capital.
This theme indicates that Bloomstran views Berkshire Hathaway as a durable, growing enterprise whose true value is not always reflected in its reported earnings, requiring deeper analysis to understand its financial health and prospects.
▶S&P 500 Overvaluation and Inefficient Capital AllocationJun 2026
He expresses significant concern about the broader market, noting the S&P 500 trades at a high multiple (26x earnings) on what he considers the second-highest profit margins in history. He is also critical of corporate capital allocation, pointing out that over half of profits spent on buybacks in 25 years have failed to reduce the aggregate share count.
Bloomstran's analysis suggests the S&P 500's current performance is built on a precarious foundation of peak margins and ineffective buybacks, signaling high risk for investors in the index.
▶The Unsustainable Economics of the AI Boom
Bloomstran is skeptical of the current AI investment cycle, framing it as a capital-intensive arms race. He highlights the projected $3 trillion in CapEx over the next 5-6 years and the poor initial return ($400 billion in CapEx for $30 billion in revenue), predicting this will lead to margin compression for the 'Magnificent Seven' and other tech giants.
This perspective serves as a counter-narrative to the AI hype, urging investors to scrutinize the capital efficiency and long-term profitability of companies engaged in massive AI spending.
▶Analysis of Key Corporate and Executive ActionsJun 2026
Bloomstran closely follows the specific actions of key executives and companies, such as Greg Abel initiating share repurchases at Berkshire, Elon Musk suing OpenAI, and Anthropic gaining market share from OpenAI. He uses these events as data points to inform his broader analysis of corporate strategy and market dynamics.
This focus on specific events demonstrates an analytical approach that connects high-level market trends to concrete, on-the-ground actions by corporate leaders, providing a more granular view of the business landscape.