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Is now (Jan 08) a bad time to buy BRKB?
Old 01-16-2008, 11:47 AM   #1
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Is now (Jan 08) a bad time to buy BRKB?

I have about 45K wasting around in a money market account. Seriously thinking about acquiring 10 shares of Warren Buffet baby stock and hold them for at least 5 years.

Should I? Anything I should know before doing it? Anyone? Nords?


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Old 01-16-2008, 12:47 PM   #2
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Is it a bad time? It's not as bad a time now at $4200 as it was at $5000 not long ago. I think BRK is reasonably valued here, but not particularly cheap.

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 01-16-2008, 12:51 PM   #3
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IMO Berkshire isn't a screaming buy below 130K IMO. According to this intrinisic value website it conservatively worth $149K. I previously posted a study showing market returns for Berkshire were quite good below 85% of IV. Never the less I bought more B shares yesterday. I think it is an excellent stock to hold during a bear market.
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Old 01-16-2008, 05:09 PM   #4
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Good, no red flags so far. Thanks guys.
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Old 01-17-2008, 06:37 AM   #5
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Originally Posted by Sam View Post
Should I? Anything I should know before doing it? Anyone? Nords?
Recent news:

It's possible that a number of mutual funds bought Berkshire last fall on news that he was buying companies (and due to publicity from CNBC's "Buffett Watch"). Once the quarter was over and they moved on to other opportunities, they stopped window-dressing and dumped Berkshire.

A couple months ago Barron's claimed that Berkshire was 10% overvalued at $150K. The stock almost immediately shed 10%.

Four ex-Gen Re execs are still on trial, accused of arranging a 2002 reinsurance policy for AIG that didn't actually transfer risk, but which AIG used to claim they'd boosted their reserves. One of the "co-conspirators" has turned against the other for a reduced prison sentence and is claiming it's all ex-CEO Ferguson's fault. Ferguson's lawyers, in turn, are claiming that Buffett knew all about it. The full details are a lot sleazier than this summary, but Buffett has not been charged although the prosecution may call him as a witness.

Buffett's Cort Rental Furniture recently bought its British equivalent, "Roomservice". Berkshire has bought more of Burlington Northern, now owning over 17% of the shares, and is probably still buying. NetJets Europe is also spending over $350M to buy 39 additional rental jets, a 29% fleet expansion. Looks like they're finally making money as European execs find that it's faster/easier to fly NetJets than commercial.

A number of insurance-industry analysts have downgraded Berkshire to the equivalent of "hold" due to concerns that reinsurance premiums will be softer next year.

Berkshire's annual report will be due out 2 Feb. If Buffett pulls out another stellar letter then the price will go up. If people expected more insurance profits then the price will go down.

Buffett's first authorized biography, by insurance analyst Alice Schroeder and titled "Snowball", is due out in April.

Oh, and we're selling the Berkshire shares in our kid's college fund sometime this month or next. She's a high school sophomore now and we're going to CDs until she sorts out the NROTC/USNA situation. But our sale is highly unlikely to even be noticeable in Berkshire's rising daily share volume.

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Old 01-17-2008, 10:09 AM   #6
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Thanks Nords.

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