From the Berkshire proxy on the merger with
we learn that, as of June 30, the combined
equity of the two companies was estimated to be:
goodwill 17,357 //
from General Re buyout
Sharehold Eq 58,043
On June 30, the S&P 500 was at
1130. Now it's at 975.
That's a decline of 14%. So
lets assume that the stock
portion of assets have
dropped by a similar amount. Also
exclude the good
will, since it's an artifact of the merger and
real asset. Then we get:
Here's a tally of the year-end ratio of stock price to
shareholder equity for BRKA.
1998* 2.12 * as
of June 30, 1998
Using the new (downward adjusted) shareholder equity
of 33,991 from above, and the current BRKA share
price of 61,300 the current ratio is:
33,991 = 1.80
This is still a little high by
mnost informative post. but much of "other" in
assets is, i expect, cash & bonds that we can hope and
expect will be put to work wisely. also part of "other"
assets are companies owned outright by brk. correct? is
the value of these companies as listed in the proxy
fairly accurate? it would be keeping in nature of WEB to
underestimate these assets.
Reply to bayposter message 6070:
I see a
possible small flaw in your logic:
1. you are
assuming that BRK has been the same type of company
across all the years you do this formula for.
For example: After BRK acquires GRN aren't
new synergies which would make BRK more valuable
than it was before and a little bit different than
before. ie. after the merger might
considered a premium insurance company whereas
the merger it was not. And because of this
BRK be justified in having a higher market price
in relation to its shareholder equity because of
new percentage mix of companies that it
-- Not an expert at all.
Do you have any capital gains to absorb your
paper loss? If so, take the gains and use the proceeds
to buy the same number of BRK.A shares. More than a
month later, sell your original "A" shares.
you have no capital gains to absorb your paper loss,
please hang on to your original "A" shares. Then, look
back 10-15 years from now.
I went through the
later episode during 1987 ("A" dropped >50% intraday
from my latest purchase price!).
Best of luck,
Sorry to hear that you are down over 25%. (if you
held on) But, let me add that we are all down 25%,
regardless of when Brk was bought. Those who bought when Brk
was say, $10,000 still lost over $20k per share from
the peak. Most would counter that they are still up
$50k, and have nothing to worry about. But this is
simply not true.
No doubt, through hard work,
you saved $60,000, (probably more). But since you
have only one life, you will never know if you could
have saved more by making better
career/educational/social choices earlier in life. You can only wonder
where you would be now had you pursued a PhD or an MBA
or even professional golf.
taking a different path 10 years ago. You are now a
professional belly dancer, touring all of South America. You
are famous and enormously wealthy.
you did not take the belly-dancer fork in the road,
you lost big time! An opportunity that cost you say,
5 million. In that respect a $20k loss is chump
change. You've already lost $4,940,000. What's another
$20,000? (I know it doesn't feel that way though, because
you have to make a living with what you have...
that's why they say invest only risk
Even Warren Buffet says his biggest mistakes are
errors of ommission...
If it'll make you feel any
better, look at Greg, AKA Napart, AKA YKWTFIAM (You Know
Who The Fuck I Am).... he down $100,000 from the
peak... and has been mysteriously silent lately. Greg,
You still there? :-)
I am tired of being called names, freaks and
I am tired of being told that baby investors are
Please kids. Let's all respect each other.
Warren works every day. I work every day. You work every
day. We all invest..let's have respect.
No one is ever happy when the stock tanks big
time. I know you said you got in at 84. I'm
Since I invested a while back, this just looks like a
real correction to me. While I don't like it, my
percentage gain is still substantial the last couple years.
I wish I knew how to predict the market
turnarounds better. I would have been out day 7 of the
turndown. All I know how to do is buy and hold just like I
really own the company. Isn't that silly? When I did own
a company, I held on in downturns so I could make
money in upturns. Again, I must be silly. It did work
without fail though...hmmmmmm..
I'm glad to see that you're still around! I want
you to know
that I bought at the same time you
did. So far, I've seen a
25% decline. However, what
can you do? The entire market is
may not mean much, but I FEEL YOUR PAIN--
me I do.
I'm just looking at this from the long
perspective. In 10-15
yrs. this should provide a much
better return than my
I just wanted to express some encouragement to a
investor in the same boat.
Sure BRKA is a better buy now than it was when it
was $20K higher.
But the problem is that when it
was $20K higher everyone was thinking of buying BRKA
so it was "perhaps" safer to buy because of upward
momentum (with an appropriate downside price stop).
the problem is that everyone is selling and it's not
at all clear when or if we've hit the bottom yet.
Momentum is now down
in BRKA. I would recommend
WAITING to buy till downward momentum has clearly stopped
and upward momentum has clearly started.
famous quote from a very successful stock investor is as
I never buy at the market bottom or sell
at market top.
My quote is that in the stock
market bulls can make money and bears can make money but
pigs can lose all their money.
thanks for some thught versus
babble. Check out BD board if you think you're not alone.
"Good companies find good solutions, poor companies
find good excuses"
Look to Nov.1 to consider
getting back in BRK regardless of price volatility
between now and then.
Let "confession" season run
through 9/20, then actual results through 10/20 followed
by the "wake" of 8 days for last Oct.27th, and it's
Work fast then because it's only 45
days til Tax Selling Season
........why should we be surprised to find
ourselves in our present condition? Everybody knew this was
coming.....sooner or later. The real question I think, will be what
WEB will do at the meeting.......whether he limits
his remarks strictly to the merger, or if he will
take questions on other issues/concerns of the
stockholders.......there's where we might get insights as to our
future..........BTW........for those who might not have heard.........the Omaha
World Herald will be covering the event and posting it
on ther site at omaha.com.......a safe and happy
holiday to all........