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When Warren speaks, people listen
Old 08-21-2007, 02:04 PM   #1
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When Warren speaks, people listen

What is the confidence level on this list for Berkshire Hathaway? Right now I have a measley four B shares. (trading just under 4k apiece). I wish I had a couple hundred. Assuming a five year horizon, when is the right time (price) to dive in? Or nevemore?
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Old 08-21-2007, 03:19 PM   #2
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Assuming a five year horizon, when is the right time (price) to dive in? Or nevemore?
Every time the markets get bad, Berkshire rises on one rumor or another.

Every time the markets get good, Berkshire falls on the sentiment that it's over.

We've held our shares for over five years. Estimates of the stock's value vary by at least +/- 30%. Considering what hesitation has cost you up to this point I'd recommend that you buy now, put them away, and see where you are in five years.

But you have to do your own due diligence. Search this board for keywords "Buffett" & "Berkshire", and try these links:
http://www.berkshirehathaway.com/ownman.pdf
BERKSHIRE HATHAWAY INC.
Sandman's Place
Berkshire Hathaway Intrinsivaluator.
Berkshire Hathaway resources

One of the best books I've read on the company is "The Warren Buffett CEO" by Robert P. Miles. (He spends quite a bit of time discussing where the company is going after Buffett steps down, and he names the candidates who are expected to take over.) Roger Lowenstein's biography is a great insight into Buffett's influences. There are also several video interviews floating around the Internet, especially Charlie Rose's three-part interview of Buffett and a later talk with Buffett & Bill/Melinda Gates.

I can't imagine selling Berkshire shares. Who would we find that's doing a better job, or assembling a better team?
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Old 08-21-2007, 03:25 PM   #3
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Thanks, Nords. As always, an A-1 reply.
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Old 08-21-2007, 03:32 PM   #4
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All Bernanke had to do was wait another day - it closed close to $3625 and I had a limit order at 3600. Obviously you know what happened next. So I a have a couple of limit orders waiting. A lot depends on the hurricane season too. Any landfall might lead to a temporary drop in price. Any price below $4000 I think is reasonable because the intrinsic value site says 4800 is the conservative value.

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Old 08-21-2007, 03:36 PM   #5
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I take a long-term view. In the long term, economic growth and stock market returns are a function of value creation. Starting with raw materials, capital, and/or intellectual capital, and creating something new and valuable.

Over the long term, if you gave me a choice between BRKA and, say, GOOG, I'd have to go with GOOG even at crazy valuations. I'm not for or against the cult of WEB, but I just don't see him creating much economic value.
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Old 08-21-2007, 04:28 PM   #6
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twaddle: Would your outlook change if he bought GOOG?
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Old 08-21-2007, 04:37 PM   #7
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Heh. That's basically what it comes down to: your faith in the performance of his existing companies and your faith in how well he'll invest the billions in cash he's sitting on.

There are plenty of mutual funds that own GOOG. So if you'e asking whether I would prefer to own GOOG directly or own it within a GIANT mutual fund with 25% cash run by a smart old guy who had excellent performance up to about 8 years ago, I would go with direct ownership.

WEB is smart, but he's old, and he himself said it's much easier to find value when you're looking at smaller companies. Like I said, I have nothing against the guy, I just don't find his holdings or the size of BRK very compelling.

You asked for the confidence level of this group. Obviously, I don't speak for the group, but my confidence level is high that BRK is holding companies with quality earnings that should do OK in a downturn, as Nords says. Otherwise, I don't see the attraction.
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Old 08-21-2007, 04:38 PM   #8
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All Bernanke had to do was wait another day - it closed close to $3625 and I had a limit order at 3600. Obviously you know what happened next. So I a have a couple of limit orders waiting.
Trading volume's gone up since Buffett started giving away shares, but I don't know if there's enough trading volume to make a limit order work the way it would for, say, Intel or GE or P&G.

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I'm not for or against the cult of WEB, but I just don't see him creating much economic value.
If Buffett understood what the heck it is that Google does, he'd probably make the same comment about its economic value.

He's known Gates for nearly two decades and still doesn't own any Microsoft, let alone any tech.
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Old 08-21-2007, 04:39 PM   #9
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I take a long-term view.
Over the long term, if you gave me a choice between BRKA and, say, GOOG I'd have to go with GOOG even at crazy valuations.
Working in the high tech field and taking the long-term view also, I would take BRK. I guess that is why there is a mkt and there are sellers and buyers. I btw donot want BRK to buy GOOG ever. I think of BRK as a low correlation asset when I think of my career as an asset.

The thing is I can think of an handful of companies which if the dice falls right can take out GOOG in a couple of yrs - anyone remember Netscape guys? There are not too many companies that can take out BRK - its too diversified and at the end of the day in the worst case scenario BRK will be making money

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Old 08-21-2007, 04:43 PM   #10
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Trading volume's gone up since Buffett started giving away shares, but I don't know if there's enough trading volume to make a limit order work the way it would for, say, Intel or GE or P&G.
Nords I am willing to listen and learn to any other techniques that you think might work. I have been doing limit orders and waiting the 60 days and in most cases I get bites. I am in no rush but if we don't see the 36XX again I will have to revisit the idea

-h
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