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BRK's successor and is anyone dumping it?
Old 04-18-2012, 08:18 AM   #1
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BRK's successor and is anyone dumping it?

I know most (if not all) the folks that are frequent contributors to this board don't change at the drop of a hat.
But, since Buffett announced his stage1 prostate cancer, is anyone more in than they are out?

Warren Buffett Diagnosed With Prostate Cancer: Hot Trends - TheStreet

Full disclosure: I had 100 BRK-B shares at one point, but sold them off about a year ago to purchase some dividend stocks which have been performing very well for me at this point.
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Old 04-18-2012, 04:29 PM   #2
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BRK.B is only 0.3% or so of my total investment portfolio, so I'm not too worried about it...but I had to laugh at the knee-jerk reaction by the financial markets: Warren does the right thing by fully disclosing a virtual non-event (given his age and his diagnosis) almost immediately, and BRK drops 1%.

Makes me wonder what would happen if the news headline was instead "WB suffers heart attack and is in serious condition at the hospital"?

It's obvious that there's a plan in place for whenever WB passes on (and/or steps down), but I suppose the markets will often act with extreme reaction.
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Old 04-18-2012, 05:03 PM   #3
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Berkshire is my second largest position at about 6%. First of all my understanding is the 5 year survival rate for stage 1 prostate cancer is around 99% so this really isn't an issue other than Warren missing work for radiation treatments.

Second if the Apple stock performance is any indication about what happens after a legendary CEO dies, I don't think share holders need to be to concerned.

Certainly there is no Buffett premium in Bershire stock.
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Old 04-18-2012, 05:38 PM   #4
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Makes me wonder what would happen if the news headline was instead "WB suffers heart attack and is in serious condition at the hospital"?

It's obvious that there's a plan in place for whenever WB passes on (and/or steps down), but I suppose the markets will often act with extreme reaction.
I hate to sound ghoulish, but I suspect a long, debilitating and possibly terminal illness would cause a slide in the stock and his passing would cause it to pop. The weird thing about the market is that it despises uncertainty, but when the thing it actually fears finally *does* happen, it tends to breathe a bullish sigh of relief. If nothing else it eliminates the uncertainty. It hates the fear of potential bad news more than it usually hates the bad news actually occurring.

Having said that, in this case even as an octogenarian Stage 1 prostate cancer has an extremely high survival rate.
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Old 04-18-2012, 06:11 PM   #5
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I hate to sound ghoulish, but I suspect a long, debilitating and possibly terminal illness would cause a slide in the stock and his passing would cause it to pop. The weird thing about the market is that it despises uncertainty, but when the thing it actually fears finally *does* happen, it tends to breathe a bullish sigh of relief. If nothing else it eliminates the uncertainty. It hates the fear of potential bad news more than it usually hates the bad news actually occurring.

Having said that, in this case even as an octogenarian Stage 1 prostate cancer has an extremely high survival rate.
Stage 1 prostate cancer now might conceivably do him in before his 150th birthday if untreated. Far more men die with prostate cancer than die from prostate cancer.

Stage 4 with distant metastasis (in the bone, particularly) would be the long, debilitating, possibly terminal version the ghouls on the stock boards are looking for.

http://en.wikipedia.org/wiki/Prostate_cancer_staging
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Old 04-18-2012, 08:16 PM   #6
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BRK.B is only 0.3% or so of my total investment portfolio, so I'm not too worried about it...but I had to laugh at the knee-jerk reaction by the financial markets: Warren does the right thing by fully disclosing a virtual non-event (given his age and his diagnosis) almost immediately, and BRK drops 1%.
It routinely drops more than that both in sync with the market and out of it. Hard to tell whether anyone cares about the announcement. But gosh, if he's looking for publicity then it's hard to top this.

Berkshire Hathaway stock is still 23.5% of our portfolio, right in the middle of the 18-28% band.

This reminds me of the apocryphal story of the senators who suspected that Woodrow Wilson's stroke had incapacitated him and feared that his spouse might be running the country. When they were finally shown into his room, their spokesman assured the President that the entire Senate was praying for him. Wilson asked "Which way?"
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Old 04-18-2012, 09:43 PM   #7
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Truth be told ...

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Originally Posted by ziggy29 View Post
I hate to sound ghoulish, but I suspect a long, debilitating and possibly terminal illness would cause a slide in the stock and his passing would cause it to pop. The weird thing about the market is that it despises uncertainty, but when the thing it actually fears finally *does* happen, it tends to breathe a bullish sigh of relief. If nothing else it eliminates the uncertainty. It hates the fear of potential bad news more than it usually hates the bad news actually occurring.

Having said that, in this case even as an octogenarian Stage 1 prostate cancer has an extremely high survival rate.
Well, that's an interesting take on it! Although I think it's pretty much right on the money!


And after having held the stock before it split 20-1, I felt it wasn't in my best interest as I'm aiming more for more growth than not, since I'm not in ER like most of y'all.
If I were in a different point in my portfolio/career, I'd probably use it as a hedge against uncertainty, and possibly will in the future.

I'm still and idiot when it comes to all this (as far as I can see), but with the gracious help of everyone on this board my eyes open wider almost every time I read some of the posts from those that have traveled the road before me.
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Old 04-18-2012, 10:29 PM   #8
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It routinely drops more than that both in sync with the market and out of it. Hard to tell whether anyone cares about the announcement. But gosh, if he's looking for publicity then it's hard to top this.

Berkshire Hathaway stock is still 23.5% of our portfolio, right in the middle of the 18-28% band.

This reminds me of the apocryphal story of the senators who suspected that Woodrow Wilson's stroke had incapacitated him and feared that his spouse might be running the country. When they were finally shown into his room, their spokesman assured the President that the entire Senate was praying for him. Wilson asked "Which way?"
I had noticed that too. It seemed to go up/down, and remain relatively flat (albeit 2-3% gains possibly) over the longer term.
I cannot tell you how much I value your's and other's wisdom from these ER forums.
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Old 04-19-2012, 11:44 PM   #9
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Old 04-20-2012, 06:24 AM   #10
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Buy BRKB on any price drops
Old 04-21-2012, 09:19 PM   #11
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Buy BRKB on any price drops

I would add to BRKB on any price drops that brings it closer to its book value. This one is a keeper
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Old 04-23-2012, 03:41 PM   #12
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I've been selling off my BRKB for much of the 7 years I've been early retired, whenever I need to rebalance my portfolio to keep a roughly 60% stocks/40% bonds ration. My logic is that while having 20+% of my portfolio in BRKB made sense during the accumulation phase, I'm now in the spending phase and I don't want that much of my portfolio to be exposed to any one thing, even if that thing is a basket of companies. So I'm down to less than 10% BRKB now, just slowly whittling it down.
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Old 04-23-2012, 04:02 PM   #13
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I've been selling off my BRKB for much of the 7 years I've been early retired, whenever I need to rebalance my portfolio to keep a roughly 60% stocks/40% bonds ration. My logic is that while having 20+% of my portfolio in BRKB made sense during the accumulation phase, I'm now in the spending phase and I don't want that much of my portfolio to be exposed to any one thing, even if that thing is a basket of companies. So I'm down to less than 10% BRKB now, just slowly whittling it down.
I think that makes sense I like keeping no more than 5% in individual stock although in Berkshire case I don't see any harm in having that number at 10%, but 20% starts to seem pretty risky and even if you think is undervalued. You aren't getting compensated for the risk.
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Old 04-24-2012, 01:01 PM   #14
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A month or two ago I put in a limit order on BRKB shares to make a play on the "Death of Warren" event. At $45 or $55 IIRC.
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Old 04-25-2012, 06:39 PM   #15
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I've been selling off my BRKB for much of the 7 years I've been early retired, whenever I need to rebalance my portfolio to keep a roughly 60% stocks/40% bonds ration. My logic is that while having 20+% of my portfolio in BRKB made sense during the accumulation phase, I'm now in the spending phase and I don't want that much of my portfolio to be exposed to any one thing, even if that thing is a basket of companies. So I'm down to less than 10% BRKB now, just slowly whittling it down.
That's funny that you say that, since I would equate BRK to a bond fond for at least the past 5 years. $72.56 April 20, 2007, $79.94 April 20, 2012 = 2% CAGR. Not bad to sure, especially through that period of time.

After all, if one backs up a mere year, the CAGR would be 5.61% ($57.62, up to $79.94).
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Old 04-29-2012, 07:27 PM   #16
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Stage 1 prostate cancer now might conceivably do him in before his 150th birthday if untreated. Far more men die with prostate cancer than die from prostate cancer.

Stage 4 with distant metastasis (in the bone, particularly) would be the long, debilitating, possibly terminal version the ghouls on the stock boards are looking for.

Prostate cancer staging - Wikipedia, the free encyclopedia
Totally agree. I went down that path a few years ago. When the doc was explaining the stages he said Stage 1 is rarely ever diagnosed because it just doesn't show up on the radar. To get a Stage 1 diagnosis at Buffet's age, pretty much a non-event.
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Old 05-02-2012, 07:34 AM   #17
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Stage 1 prostate cancer now might conceivably do him in before his 150th birthday if untreated. Far more men die with prostate cancer than die from prostate cancer.

Stage 4 with distant metastasis (in the bone, particularly) would be the long, debilitating, possibly terminal version the ghouls on the stock boards are looking for.

Prostate cancer staging - Wikipedia, the free encyclopedia
Thanks for the info, I didn't realize that about stage 1 prostate cancer.
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Old 05-13-2012, 08:30 PM   #18
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I read a lot of speculation about Buffett's successor, but this is an interesting twist.

Warren Watch: Votes go to Burke - Omaha.com

Board member Stephen Burke.
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He's 53, which on Buffett's scale would give him at least 30 years to run Berkshire...
Burke joined the Berkshire board in December 2009, which means he has attended three shareholder meetings as a director and probably a score of board meetings.
When he was appointed, Burke was chief operating officer of Comcast Corp., and Buffett called him “business-savvy, owner-oriented and keenly interested in Berkshire.”
Today Burke is CEO of NBC Universal and executive vice president of its parent company, Comcast Corp...
He recently bought 11 shares of Berkshire's Class A stock at an average price of $122,977 each, bringing his ownership to 16 shares, worth just under $2 million at today's prices.
Another Berkshire connection: Before Comcast, Burke was president of ABC Broadcasting, a division of the Walt Disney Co., which was partly owned by Berkshire. He helped developed the Disney Store chain. His father, Daniel B. Burke, is former president of Capital Cities Communications, which formerly owned ABC. In 1985, Berkshire was Capital Cities' biggest shareholder.
Normally I'd discount this speculation because Burke is a board member, not an exec of a subsidiary. He's also probably unable to just drop his day job to take over Berkshire. There are also a couple more qualified execs who you would hope are more ready to step up. But it's interesting to read about the Disney and ABC and Cap Cities connections.

The rest of the article is entertaining reading about Buffett's comment on the failed $20B acquisition, his assumptions for economic growth, and Charlie Munger's oil commentary.
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Old 05-14-2012, 11:55 PM   #19
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I

The rest of the article is entertaining reading about Buffett's comment on the failed $20B acquisition, his assumptions for economic growth, and Charlie Munger's oil commentary.

I agree with Charlie, no reason to use our when other people are willing to sell a very valuable and limited resource for a pretty inexpensive price. Certainly a $/BTU oil is why cheaper than any renewal resource and has a wider array of uses beside just energy production.

That said I am less than thrilled about propping up regimes like Iran, Russia, and Venezuela.
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