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....
".how can E-Trade have shares when Alex Brown
can't meet their own in house demand?"
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
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?
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
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' marketwatch.com 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
shares......it is way,way, over-subscribed.......how 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
"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
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