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Berkshire Hathaway Inc. Message Board

  • makingdoe makingdoe Feb 17, 1999 1:54 PM Flag

    why would he buy these..

    Without looking at a lot of data, i quickly
    looked up info on these two companies.
    Why would wb
    buy into these companies. They dont seem to fit into
    his mold in several areas.

    ROE was low on
    both. Believe both had a good amount of debt.
    I know
    he doesnt esecially ;look at earning, but if he did,
    both are priced high compared to earnings. I just did
    not see a value play, or grat business
    fundamentals.

    What did he see? Just curious.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I own the stock, but, did not read it that 80,000
      should be added to the stock price.I read it that the
      earning power of 80,000 per share should be added to the
      fair value of an " a share".As an example, if he makes
      an extra 5% with the money thats $4,000 per share.

    • Your knowledge of accounting and corporate
      finance is obviously weak. What Buffett said was that for
      each share of Berkshire A issured to shareholders of
      General Re, that Berkshire got $80,000 in value, not in
      addition to the current share price but in exchange for
      the General Re stock. But $150,000 per share works
      for me.

    • if you think you know how to pick stocks, pick 'em. if not, find someone who does and hitch a ride. why ask why?

      • 1 Reply to scuddaddy
      • Exactly! That is the only logical approach for
        the individual investor to take. Hitch a ride. And
        don't hitch it with some underperforming and overhyped
        mutual fund manager. Stay away from Janus, Putnam, and
        all that other junk.
        History has very clearly
        shown that the ability to beat the market averages by a
        significant margin in the long run is extremely rare. It is
        easy to confuse a lucky hot streak with real stock
        picking talent, but time brings reversion to the mean for
        all but a few. Peter Lynch and Buffett clearly are
        market beating stock pickers; almost everybody else,
        including clowns like Mario Gabelli, Jim Jubak, & Michael
        Price, are not.
        The key realization one has to come
        to with this approach is that one shouldn't try to
        do one's own analysis of individual stocks. Pick the
        right master stock picker, and let he/she do the stock
        picking for you. Don't try to figure out or understand
        what is going on at the companies you invest in. To do
        so is a waste of time (contrary to the advice you
        always here - "understand what you invest in." This only
        applies to people that do their stock picking on their
        own. Am I going beat the market picking stocks on my
        own? NOT!!) Picking stocks on your own, and doing your
        own analysis in support of it, is fun for some
        people, but is a complete waste of time unless you are
        one of those rare birds who actually is a
        market-beating stock picker- not just someone who just thinks
        they are a market-beater. IMHO.

    • He bought them at 32s. I am sure he lose tons of money on this one. Buffett and Munger used to buy Windmills. They are humans and entitle to make serious mistakes.

 
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