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NIKE, Inc. Message Board

  • makingdoe makingdoe Dec 19, 1997 2:46 PM Flag


    i have to admit shock at how well nike has held up, especially with todays down market.
    thought for sure stock would be lower.
    it could get there eventually, i personally would not buy here
    but seems there is some support.

    question, when did w. buffett buy nike shares? that was news to me.

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    • There were rumors earlier this year that Buffett was going to buy Nike, but he never did. When he announced another deal a few days later, Reporters asked him about Nike and it was news to him. The stock went up 7 and down 8 over the course of a couple days. Buffett basically said that all those people who lost money on it deserved to for buying on stupid rumors.

    • for those spreading the news about Buffett and to makingdoe who asked the question....

      Rumors of Buffett buying Nike shares mid-summer were never confirmed by anyone. There has been talk that I personally have not confirmed that Lou Simpson, Investment Officer at GEICO, has been purchasing Nike shares for some time. Simpson's investment philosophy is apparently similar to Buffett's. Float from Berkshire's wholly owned GEICO subsidiary generates a good amount of Berkshire's free cash for investment.

      Many people leaving messages on this bulletin board assert that $30 a share would give Nike a "reasonable" P/E of 15 based on CEO Knight's FY 1998 earnings estimate (low of his range )of $2/share. If Nike earned $2 in FY 98, 3-year average earnings would = $2.20, giving Nike a P/E of 13.6 at $30.

      I do not doubt that stock market vagaries are capable of making that price a reality. However, one must question whether Nike's P/E based on 3-year average earnings should be roughly half that of the S&P 500.

      Given that the slowdown in athletic footware sales is not specific to Nike, the relevant question is: Are consumers in the U.S. and abroad not buying sneakers in the next 6-12 months, or will they never buy again? The answer is obvious, but knowing that shoe sales can't plummet indefinately won't make any of the E*Traders reading this message become long-term investors.

      As a part-owner of a wonderful business, I have complete confidence that speculators will find some "support" in one of Nike's charts sometime in the near future. As to when, I do not know, but it appears that many other people posting messages on this board know.

    • Buffet has an assistant/second in command that I believe is running GEICO, one of BRK's large holdings. This individual is thought to be Buffet's heir apparent and is reported to be very fond of NKE. He has been acquiring slowly for many months.

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