Recent

% | $
Quotes you view appear here for quick access.

Qorvo, Inc. Message Board

  • dbr_x6 dbr_x6 Jan 27, 2009 2:02 PM Flag

    Buffett is being wiped out. Literally.

    I think these are all perfectly good stocks to load up on, once we get at or below the 2002 lows.

    Buffett thought this was the 1970's, where he made his billions.

    He was wrong.


    1. Wells Fargo (WFC Quote - Cramer on WFC - Stock Picks) closed at $37.53 on Sept. 30, 2008. Last week, it closed at $15.87. Berkshire owns 290 million shares, a drop of $6.3 billion dollars.

    2. American Express (AXP Quote - Cramer on AXP - Stock Picks) closed at $35.43 on Sept. 30, 2008. Last week, it closed at $16.00. Berkshire owns 151 million shares, a drop of $2.9 billion dollars.

    3. Coca-Cola (KO Quote - Cramer on KO - Stock Picks) closed at $52.88 on Sept. 30, 2008. Last week, it closed at $42.20. Berkshire owns 200 million shares, a drop of $2.1 billion dollars.

    4. Burlington Northern Santa Fe (BNI Quote - Cramer on BNI - Stock Picks) closed at $92.43 on Sept. 30, 2008. Last week, it closed at $63.32. Berkshire owns 63 million shares, a drop of $1.8 billion dollars.

    5. ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) closed at $73.25 on Sept. 30, 2008. Last week, it closed at $48.10. Berkshire owns 60 million shares, a drop of $1.5 billion dollars.

    Some commentary:

    If one triangulates Buffett's comments in his annual reports during the late 1990s, he seems to view Berkshire's intrinsic value as the sum of its investments per share plus approximately 12 times pretax profits, excluding all income from investments.

    Given many of my concerns expressed initially in March 2008, I am increasingly coming to the conclusion that the above calculation of intrinsic value is too liberal.

    Considering the high cost of Berkshire's investment style drift into derivatives (massive short put positions), Buffett's refusal to sell and his apparent lack of recognition that investment moats no longer exist in some of his largest investments (especially in banking), I now feel that Berkshire's valuation will steadily suffer, despite the long-term allegiance of its investors who are geared toward evaluating the company over decades, not years.

    Indeed Berkshire, in the fullness of time, might suffer the same fate of many other listed closed-end equity mutual funds; its shares could trade at a discount to its investment value per share -- plus some multiple to pretax profits.

    SortNewest  |  Oldest  |  Most Replied Expand all replies