Berkshire?

[Darryl]

I started to think about some berkshire b for my portfolio about a week ago.

I'm thinking of it as a noncorrelated or less correlated item (no intention of buying gold or mining). Love the idea of putting in taxable account with the zero dividend and belief I would hold 10+ years.

Is it really less or noncorrelated?

It just had a nice run up and sorry but is the (timing right)?

It is tax efficient and I like the idea they are looking for good business' to be involved with rather than all the short term [-]games[/-] gains that may be chased in other parts of the portfolio.

Thoughts

 

[clifp]

LOL, I was just about to make a post wondering if it was time to sell my Berkshire.
I have a few B shares (as does my Mom, and ex-girlfriend), I also have one A share, how many B's would you like at $4414? I guess this is what makes markets!

I bought the A at 85K 2+ years at the time I figured the stock was worth at least $120K at it was almost certain never to dip below 60K for long. I figured 2+ years of earnings, plus an increase in stock values, and Warren's good health have add ed$20-$30K to its value so this makes it worth 140-150K. I'd recommend using this calculator to make your own estimate of the intrinsic value.

As s long term investment, I think it will probably track the market but with less downside risk due to Warren's investments skills, huge cash position, and the company's reputation. That said for a variety of reasons I don't we will ever see a Google like overvaluation of Berkshire. In fact as long as Warren is CEO, IMO the company stock price will be lower than the intrinstic value of Berkshire.

 

[Nords]

LOL, I was just about to make a post wondering if it was time to sell my Berkshire.
I have a few B shares (as does my Mom, and ex-girlfriend), I also have one A share, how many B's would you like at $4414? I guess this is what makes markets!

Nice jump, eh?

I figure that hurricane season is just about over and reinsurers got away with it again this year, so now Berkshire's back in favor.

Either that or no one expected the Red Sox to win the World Series and Jordan's is really glad they were insured.

The quarterly report is also due out Friday night (2 Nov) so if you're gonna buy then do it quick.

Clif, gimme a call when you're ready to sell your "B" shares and I'll give you a good deal...

 

[mn54]

The hurricane season may be just about over but those Calif. fires have to make a dent in the ins. industries bottom line. And the Ins. cos. can't argue over whether it was water damage or wind damage, and whether it is covered or not.

 

[cute fuzzy bunny]

Love the company, love the stock, great affection for Warren.

But he's an older fellow, chubby and likes cheeseburgers and candy an awful lot.

I think the stock takes a huge haircut the day he throws a rod, god bless him and I hope its a long time before that happens. And I believe he has built a quality organization full of smart people that know what to do. But the market wont think about that for a while. And its possible that theres no effective transfer of knowledge, that its instinctual. If someone could learn what Warren does, wouldnt someone have wandered off with the knowledge and become a billionaire?

I think I'd rather buy the stock a week or two after that haircut.

However I do wish I still had the A share I bought for $57,000 some years ago and sold at $85k.

 

[Nords]

If someone could learn what Warren does, wouldnt someone have wandered off with the knowledge and become a billionaire?

Sure, Eddie Lampert and the Danaher brothers, although none of them come across as well on the media. I wonder about foreign investors handling their family fortunes in places like Saudi Arabia, China, and Singapore, where the rules aren't so tightly enforced and Buffett is followed even more closely than here.

Possibly Howard Buffett (don't know) and I'd love to see Lou Simpson's net worth. Maybe Rich Santulli & Tony Nicely as well...

It's worth considering that Buffett made his first fortune with his partnership in the 1950s & 1960s before selling out. A few years later he was in the thick of 1973-4 and a well-trained value investor with his contacts couldn't help but find blue-light specials everywhere. Maybe someday that confluence of hard-wiring, training, and a sucky economy will recur.

But, yeah, I agree with you on the possibility of a funereal haircut. Good reason to avoid single-stock risk. Got a better money manager in mind?

 

[saluki9]

However I do wish I still had the A share I bought for $57,000 some years ago and sold at $85k.

You probably feel just about as good as I do looking back at the 100% profit I took on Apple when it went from $13 to $26

I agree that the stock will take a haircut when warren checks out. I will be there buying. Besides being a great investment mind, I think he's also a great talent scout. Running the company without him will not be impossible.

 

[cute fuzzy bunny]

I cant find a better one.

How about a whole bunch of them that are pretty good?

Its a bit more than single stock risk, I think theres a "we love warren!" emotional premium in the stock. But then the stock isnt priced to market for the value of the holdings. Just seems to me there'll be some fun volatility between the institutional holdings that will want to pare back, long time rah rah boosters.

Same reason why I've never owned Millers fund. If he runs, a lot of folks will bail out.

 

[cute fuzzy bunny]

You probably feel just about as good as I do looking back at the 100% profit I took on Apple when it went from $13 to $26

Hmm, I owned AAPL for a brief time back in 99 but I dont remember the buy and sell prices, although I'm sure I made a couple of bucks.

Perhaps you noticed, since I wasnt paying attention at the time. Were the shares easier to buy and sell than other shares and were they a bit more fireproof?

 

[saluki9]

Perhaps you noticed, since I wasnt paying attention at the time. Were the shares easier to buy and sell than other shares and were they a bit more fireproof?

Quite the opposite.

as you know Apple has always been about the boom and bust. I bought them in the early 1990's as an emotional investment (hey I was a teenager without much investment sense)

I sold in the late 90's when the Mac started to garner some more attention and the tech rally was just heating up. I stopped following the company at that time, I should have just kept buying the stock.

Oh well

 

[Nords]

I stopped following the company at that time, I should have just kept buying the stock.

I'm in the "bought at $11, sold at $16 after a few months" club. It was just the release of OS X, for gosh's sake, and it was screaming up way too fast.

I've learned not to beat myself up. I've read plenty of histories of great stocks that have appreciated x000% over a decade. Most of the time you would've looked at them and run away screaming.

Apple: microscopic market share, miserable managment (Gil Amelio), succeeded by an obsessed control-freak has-been who blew a software company (NeXT) and was playing dilettante with cartoonists (Pixar). Yeah, that'd be a roaring success. Stick to Xerox.

Enron.
Worldcom.
Global Crossing.
Wal-Mart.
Pfizer.
McDonald's.
Microsoft.
Disney (especially during the Eisner years after Frank Wells died).
New Coke.
Martha Stewart Omnimedia.

And how many had the guts to back that Investor's Hall of Shame Has-Been of 1999, Warren Buffett?

I could go on and on and on...

 

[cute fuzzy bunny]

Its not much of a science, is it?