Warren Buffett might finally have found the bargain he was looking for in this era of inflated asset prices, and in his Omaha backyard too. Berkshire Hathaway has decided to adjust its share repurchase criteria, giving Buffett and his sidekick, Charlie Munger, the flexibility to repurchase equity when they believe Berkshire shares are below their view of intrinsic value, "conservatively determined". Buffett had famously set a mechanical bar for buy-backs in the past. Berkshire was only interested in buying its shares if they traded below 120% of book value. The revision is an intriguing signal that Buffett believes acquisition targets are simply too expensive for his tastes. The more precise conclusion is, however, that Berkshire is just so large that it has the firepower for both blockbuster deals and capital return. Berkshire’s price-to-book ratio is currently about 1.4 times. There is no precise threshold where a stock must be above intrinsic value. However, Buffett has historica...

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