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Berkshire Hathaway Inc. Message Board

  • hjclasvegas6969 hjclasvegas6969 Jul 6, 2014 9:55 AM Flag

    buffetts1983 letter to shareholders, read this section, Stock Splits and Stock Activity

    if you still aren't certain about some of the silly things buffett has written over the years.

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    • I think Mr. Buffett is calling you an inferior investor. I think he nailed it.

      "Were we to split the stock or take other actions focusing on stock price rather than business value, we would attract an entering class of buyers inferior to the exiting class of sellers. At $1300, there are very few investors who can’t afford a Berkshire share. Would a potential one-share purchaser be better off if we split 100 for 1 so he could buy 100 shares? Those who think so and who would buy the stock because of the split or in anticipation of one would definitely downgrade the quality of our present shareholder group. (Could we really improve our shareholder group by trading some of our present clear-thinking members for impressionable new ones who, preferring paper to value, feel wealthier with nine $10 bills than with one $100 bill?) People who buy for non-value reasons are likely to sell for non-value reasons. Their presence in the picture will accentuate erratic price swings unrelated to underlying business developments."

 
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