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Berkshire Hathaway Inc. Message Board

  • troy48075 troy48075 Jan 11, 1999 4:09 PM Flag

    BRK must be a religion

    I'm really impressed by BRK. It's now back to its
    April level. You could have put your money into a
    mutual fund making 25% and at least cleared 18% instead
    of sitting here with a stock that's bogged down
    because WEB made a deal that lets former GRN stock
    holders cash out and screw up the whole thing. The only
    other comparable deal I can think of is giving money to
    a religious organization that promises you a great
    time after you're dead. Yeah, sure....

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    • ".how can E-Trade have shares when Alex Brown
      can't meet their own in house demand?"

      I don't
      know, but they did. Like GeoCities and E-bay, E-trade
      probably received a certain number to distribute among
      its' customers who express interest. I will let you
      know tonight or in the A.M. Friday how many shares
      they (if any) allot. Usually, E-trade only gets you
      200 shares, but 200 shares at $14 to $16 which will
      no doubt trade between $50 and $100 the first day is
      nothing to complain about.

    • I don't know that the IV or book value will work
      out like that this year. I do think we may be
      undervalued at this price. For sure it is at or below a fair
      value. It will interesting to see the next annual
      report. We know that Investments Per Share will be up
      because of the GRN purchase. Operating earnings will be
      up, but there will be more shares outstanding because
      of the GRN purchase. But when you consider that the
      third quarter report showed a book value that was less
      than that at the beginning of the year, book value
      would need to have increased by a huge amount to get up
      to your $60,000 per share. But the GRN purchase will
      increase book value per share and that will show up at
      December 31. And like Benkea, I do feel comfortable that
      the GRN purchase will add to all the per share
      figures, book, IV, earnings etc. The question now is what
      does Buffett do next? The bigger BRK gets, the more
      difficult it becomes to get the same growth in book value.
      I don't think he can do a GRN type purchase every
      year, such companies just are not available. And the
      Flight Safety International and Executive Jet type
      purchase are not large enough, as welcome as they might be
      at any size. I do see one more big opportunity, and
      that is the investment of all the cash and bonds into
      common stocks. But he needs for the market to provide
      that opportunity. Maybe BRK share price will go up to
      $100,000 a share later this year and he will make a large,
      for-stock, non-insurance acquisition that will surprise all
      of us.

      How about this? Once a year the share
      price goes to an unreasonable, unsustainable level for
      two months, during which time Buffett uses his
      overvalued stock to make an acquisition at an attractive
      price, following which the price of BRK comes way down
      to provide a buying opportunity for those who desire
      one. Then the next year the same process repeats
      itself. How would that be?

    • Mr. Heartless,

      The growth rate on BRK
      book value is around 23.5% on these 30 years. So,
      acoording to your calculation on Brk IV on 97, the IV of
      BRK on 31-12-98 is $49,000*(1+23.5%)=$60,515. Mr.
      Market is priced BRK at a fair price. Right?

    • I have a much simpler way of computing

      Buffet says he doesn't like BRK price to deviate much
      from IV.

      So, draw a straight line right smack
      through the middle of one of those 20 year charts and
      look at where it crosses on January 1999!

      helped me 'conclude' that $84k was way overvalued!...
      and today, we are undervalued....

    • ........I thought I saw a post on another board
      to the effect that E-Trade was going to get some
      pre-IPO shares of CBS' for you....I was
      puzzled by that because Alex Brown is bringing the issue
      to market on Friday and my broker is a Principle in
      the firm and is having trouble getting me is way,way, can E-Trade
      have shares when Alex Brown can't meet their own in
      house demand?........What am I missing here?

    • You know you can spend a lifetime reading
      messages on Yahoo boards but this one is really special.
      Maybe its the company and the uniqueness of its
      shareholders. But this board offers an intrinsic value this is
      also unique. You can learn something here. Thanks
      again for your help. The knowledge of Berkshire
      Hathaway that you openly share is appreciated by everyone
      that will take the time to read your

      I have also enjoyed the postings of "iluvbabyb ."
      Message 9583 just makes alot of sense and are probably
      words of conviction from any longtime Berkshire
      Hathaway shareholder.


    • "they grew so rapidly and so dense that I wore
      out two pairs of Sears heavy duty clippers, one tree
      limb saw, and almost burned
      my fence down trying to
      clear out the stumps...They had all grown
      up over
      night, and I never had a chance against them....sneaky

      They BETTER. That is why I bought them. They are a
      back property line privacy hedge.

    • "So likewise, I know that if the Coke, Gillette
      etc. securities do not depreciate much, and I know of
      no reason to think that the other businesses are
      being adversely affected, I need not get worked up on
      decreases in the share price of BRK when it goes

      Really there are several reasons why BRK "inevitable"
      valuations are less important to BRK intrinsic valued than
      they are deemed.
      First, based on BRK's ORIGINAL
      cost, most of the key holdings generate huge dividends
      (of which 90% are tax-free).

      Second, if BRK
      earned a paultry 10% annually on the "unrealized taxes"
      due the gains in those equities, we should be pretty

      So, on the initial outlay of cash for those
      securities we earn huge dividends. On the appreciated
      portion of those holdings, we earn huge returns on the
      investment of that capital that legally belongs to IRS
      (other people's money in the best way).

    • "We were selling stock with an IV of about
      $50,000 per share at a market price of about $70,000,
      with that "profit" accruing to the shareholders of

      While at the same time Buffett
      accomplished the above, he did it at the exact market top and
      re-allocated from high-risk (due to valuations) equities to
      low-risk (and undervalued in retrospect) bonds -

      The guy is the best! Hands down. And the miracle is
      that he comes full to the brim with integrity and
      honesty. All I know is that I too have read all but that
      damn Buffettolgy book (which I didn't like enough to
      finish either), but I was truly moved at last year's
      meeting. Up until the meeting, I found Buffett to be a
      very admirable human being. However, at the meeting
      when he spoke about the % of his family and his
      friends' net worth being tied up in BRK, I ABSOLUTELY felt
      Buffett takes his role as STEWARD of others' nest eggs,
      dreams, and security EXTREMELY seriously. This is why he
      doesn't gamble on net stocks and the like, and that is
      fine with me.

    • You'll be sorry about those bamboos. I planted a
      bunch of them and they grew so rapidly and so dense
      that I wore out two pairs of Sears heavy duty
      clippers, one tree limb saw, and almost burned my fence
      down trying to clear out the stumps. It's one
      experience I'll never forget. They had all grown up over
      night, and I never had a chance against them....sneaky

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