BRKb?

HDPM · #1 06-30-2004, 07:31 PM

I don't know much about the stock market, but I am kind of intrigued by berkshire. I have thought of buying a few of the class b and then adding to it once in a while. Sort of instead of some kinda mutual fund. I started looking at it once in a while a few years ago and never bought any. Needless to say it has done better than other stuff I have. Anyway, what is your opinion of this as a buy and hold long term thing?

laserboy · #2 06-30-2004, 08:26 PM

Like you said, buying shares of Berkshire is essentially equivalent to buying shares of a mutual fund managed by the most successful money manager of all time. I view it as an extremely safe investment in what IMO is an extremely overvalued market right now. His style of value investing really tends to shine in bear markets (which I believe we are in).

The main drawback is that he is somewhat limited by the massive amount of capital he has to work with. It is much more difficult ot invest 100 billion dollars for superior returns than it is to invest 1 billion when there are only a limited number of truly superior investments on the market at any given time. So I think it would be unrealistic to expect the kind of huge returns he has produced in the past.

Check out the website and read some of his letters to shareholders. They are very readable and give you a good sense as to what the man is all about.

GeorgeF · #3 06-30-2004, 10:08 PM

I have owned BRK since Gulf War I. Needless to say I wish I had sold in 1998 or so but instead I paid $40k to learn a hard lesson.

1) BRK is an insurance conglomerate not a mutal fund. BRK can loose alot of money fast as 9-11 showed. BTW, BRK (and many people) got lucky on 9-11. It could have gotten much worse if the airplanes had hit lower trapping more people.

2) You might consider a mutual fund that invests in BRK:
http://www.usatoday.com/money/perfi/...erkshire_x.htm

Check that the info in the article is still current.

3) I personally think that rising interest rates will be good for insurers.

4) Many of BRKs holdings like Coke seems stale.

5) BRK is basically building up a large cash hord hoping that the value of money does not decline much and that stock markets fall in value. That strategy has failed many times in the past. See the parable of Sewell Avery:

http://www.buyandhold.com/bh/en/educ...meryward2.html

laserboy · #4 06-30-2004, 10:51 PM

I think it would be a little simplistic to classify them as just an insurance conglomerate. Yes that is their primary business (a business at which they are among the most efficient and profitible in the industry). But the true value of the company lies in Mr. Buffet's money management and investing skills. In that respect, it is similar to a mutual fund.

How much did you pay for it in 1992? Are you not happy with a 500% return on your investment?

Ray Zee · #5 07-01-2004, 02:13 PM

buffet is an old man. when he goes the mistique of the company goes with him. so beware.
i wouldnt touch it with a ten foot pole. but i would short it the first i heard he was sick. we talked about this a while back, hdpm.

Carl_William · #6 07-01-2004, 04:22 PM

just a comment:

Maybe 5 or 6 years ago I bought 4 shrs of BRKb at around $1250 or so. Then I added 8 more shares in the cost range of $1800 to $2400. For a while the price dipped alot, but it has recovered to around $2900 -$3000 range. The point is that BRKa (BRKb is a more recent offering) made more than 20% per year for a period of over 15 years or so; but in recent years it has not made much but it has beat the 500 S&P index in the last four years.

Carl_William · #7 07-01-2004, 04:26 PM

Ray
You could be right on this tactic. You evidently don't think that Buffet's sidekick could carry on -- or maybe the sidekick is also too old. We will see.

Senor Choppy · #8 07-01-2004, 04:39 PM

There are a few things you're paying for when you buy Berkshire Hathaway, an insurance conglomerate, a few publicly traded companies like G & KO, a lot of buying power, and the expertise of Warren Buffet.

I think Gilette and Coke and overpriced, and if you happen to be a fan you can probably get them cheaper by buying them directly. If Buffet was going to be around longer I'd be more of a fan, but as it is it's hard to imagine this stock still attracting the premium it does today after he's gone.

Carl_William · #9 07-01-2004, 05:06 PM

This is getting scary. Has anybody done any research on Warren's expected life span. If so, please post it. Mabe I should dump my 12 shares of BRKb. Thanx for advice.

bob2007 · #10 07-01-2004, 05:41 PM

I'm young, maybe I don't know better, but I've heard that they are loaded with cash and Buffet doesn't wanna buy any companies which are against his investing style.

IMO there are better things to do with the money even buying something that doesn't have huge returns than to let the money sitting there.

I question his methods right now.