Selling BRK/A below $151,650~ Or BRK/B below $101.10

January 21st, 2010 by Rich

He offered a sort of investor populism by heading off imitator BRK funds and issuing BRK/B shares trading at 1/30th the price of BRK/A, albeit with reduced voting rights and no convertibility to Papa BRK/A shares.

For years Mr Buffett eschewed stock splits as his shares went higher and higher.

Perhaps this added to the mystique. However, today BRK/B split 50:1, making the BRK/B shares 1/1500 the price of BRK/A shares.

Both A and B BRK shares soared.

That 79 year-old Mr B still thinks BRK and Mrs Market may outperform most investors is perhaps best exemplified by his Million Dollar January 2009 decade-long wager with Protégé Hedge Funds that the Vanguard S&P500 index fund will outperform them because of lower fees.

http://money.cnn.com/2008/06/04/news/newsmakers/buffett_bet.fortune/index.htm

This may be the classic hare and tortoise bet.

Interim results of the wager are reported each spring at the Berkshire Hathaway Annual meeting. So far, hedge funds may be ahead, because they shorted the market when it went down.

But what of the foreseeable future?

Won’t earnings increases and the growth of the economy outshadow stock market speculators to favour long-term investors?

We think not.

Perhaps Berkshire and Mr Buffett’s Achilles heel may be his eternal optimism about the growth of the world economy and value stocks.

It is interesting to note the Omaha Oracle wrote two Opinion Pieces in the New York Times.

The first, in October 2008 during the Fall Credit Crisis Crash, was

Buy American. I Am.

Mr Buffett gave his simple rule for successful investing:

Be fearful when others are greedy, and be greedy when others are fearful.

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This entry was posted on Thursday, January 21st, 2010 at 6:18 pm and is filed under Market Psychology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Selling BRK/A below $151,650~ Or BRK/B below $101.10”

  1. Brk.b On Twitter | Tech News Says:
    January 22nd, 2010 at 12:05 am

    [...] Jubilee Prosperity » Blog Archive » Selling BRK/A below $151650 …Selling BRK/A below $151650~ Or BRK/B below $101.10. We have a lot of respect for Warren Buffett, perhaps the most successful investor of all time, exemplified by his Berkshire Hathaway Holding Company. And today the bullish rumour is … Read more [...]

  2. Rich Says:
    January 26th, 2010 at 1:26 pm

    Aloha All
    We learned at least one person was unclear why we headlined
    selling BRK/A below 151,650 or BRK/B below 101.10 when recent
    prices were 109,995 and 73.43 respectively.
    The long-term trend is our friend.
    We like to buy on weakness in a primary uptrend or sell on strength in a primary downtrend.
    With all the excitement about the 30:1 and 50:1 net 1500:1 splits, the 50:1 motivated by taxes from the BRK acquisition of BNI and the BRK KFT acquisition of Cadbury, we wish to remind folks Mr Buffett seems to be going against core declared principles promoting free markets while supporting government bailouts and guarantees that riddle them with moral hazard, calling for higher taxes while seeking to buy tax credits, eschewing stock splits while completing a 1500:1 stock split, and declaring derivatives weapons of mass financial destruction while selling naked puts that reduced the credit rating and earnings of BRK.
    We think the clear long-term trend of BRK may be down, so caveat emptor…
    Regards*Rich

 

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