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Berkshire Hathaway Inc. Message Board

  • hclasvegas hclasvegas May 9, 2005 3:04 PM Flag

    Dear Mr. Buffett,

    I'm SO confused,help me out here. I'm long,we are down again,is that good? Thanks man.

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    • I am not Warren Buffett, and I have a way to go before I'm a billionaire. But it seems to me Mr. Buffett has answered your question every year for the last twenty-five years.

      From the Owner's manual:

      To the extent possible, we would like each Berkshire shareholder to record a gain or loss in market value during his period of ownership that is proportional to the gain or loss in per-share intrinsic value recorded by the company during that holding period. For this to come about, the relationship between the intrinsic value and the market price of a Berkshire share would need to remain constant, and by our preferences at 1-to-1. As that implies, we would rather see Berkshire�s stock price at a fair level than a high level. Obviously, Charlie and I can�t control Berkshire�s price. But by our policies and communications, we can encourage informed, rational behavior by owners that, in turn, will tend to produce a stock price that is also rational. Our it�s-as-bad-to-be-overvalued-as-to-be-undervalued approach may disappoint some shareholders. We believe, however, that it affords Berkshire the best prospect of attracting long-term investors who seek to profit from the progress of the company rather than from the investment mistakes of their partners.

      So, frankly Mr. Vegas, high or low doesn't matter to WEB. If you want to take the time to figure out whether BRK fits in your portfolio, please do. If you want WEB and CM to manage the company to maximize the stock price, you are in the wrong place.

      As WEB has said, an active investor, with a relatively small pot of money and the right temperament should blow away BRK returns in the future.

      He's not forcing anyone to stay in BRK. You regularly post all of these wonderful investments that are outperforming BRK and you are certain they will continue to do so. You have no significant gain in BRK, so tax issues should be minimal.

      Go make your riches - it will be time better spent than trying to teach new tricks to a couple of very old billionaires.

    • Hey man, it's late enought for your first drink of the day. Go for it.

    • Its really quite simple.

      If you're looking to buy--a lower price helps you out.

      If you're looking to sell--a higher price helps you out.

      Or is that just way over your head??

      >>I'm SO confused,help me out here. I'm long,we are down again,is that good? Thanks man.

    • Answer: use your own judgement and if you have none, buy an index and forget it !

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