he ignores the price and focuses on intrinsic/enterprise value (this is from CNBC).
Julia: Your stock is off about 25 percent from the high.
Buffett: From the high, yeah.
Julia: Do you think about that? Are you worried about that?
Buffett: I never look at it. I could not tell you what it's selling
for. It doesn't make any difference. I can't tell you what its
selling for on April 9, 1993. It doesn't make any difference. I'm
going to hold it forever. I'll be giving it away. But, it just
doesn't make any difference. The important thing is whether we're
building value at Berkshire.
Fair enough sharpy, but ,many decent people have been reading our posts for 5-6 years now, why make partners feel stupid fot not having sold at 5k plus ? Did Buffett talk the stock down at 5k plus ? He was all over the tv back then, no ? IF it wasn't overpriced at 5k, why isn't it a sound buyback @ 3900 ? Did the Foundations sell at 5k plus, if not, why not ? Was brk CHEAP at 5k in Buffetts opinion hence few sales by the Foundations ? Lets see a few college boys step up, no double talk and Brkville U Madrassa bullshit, at 3900 buy or sell ? Is there 10 % downside risk from here ? I know , I know, DOWN is f--kn GOOD ! ucmtsu,no way.
I never cherry pick numbers...I always work off conservative fair value. I am recorded on this site for suggesting to geepod (and anyone else that needed to)to take money off the table in the fall if they needed some pocket change. I didn't need the money so I didn't sell (all my BRK is in a taxable account). I also won't buy at fair value...I want at least a 25% discount so I am not buying at these levels and haven't bought any shares for years (I came close during Katrina but I was surfing porn on the internet and missed my buy price). I also don't care what the foundations do...couldn't care less when they sell and at what price. I also had a conversation with you on this site that I didn't think Seqouia was nuts for selling shares when they did because I thought they received fair value. You can say what you want about my madrassa leanings but I don't cherry pick...I am always working off conservative fair value.
HC, 5K wasn't high and that's why the foundations didn't sell. At 5K, BRK's valuation was still under a lot of other diversified high-value companies, and not high in light of prevailing interest rates. The market's sold it off like crazy from there, but it wasn't a price where Buffett was walking around saying he would never buy at this price and so forth like in the late 1990s. The Marmon purchase that came through at about the time of the peak fully justified the price. Probably, results have deteriorated in the operating units since December, and the financials in the portfolio have been hit, but that's cyclical stuff. With the six-figure stock quote, derivatives exposure, and ever present super-cat risk, Wall Street doesn't like this stock's potential for nasty earnings surprises, and main street can't afford it as part of a diversified portfolio. As a result, this stock appears to be permanently undervalued, like a value trap except it increases in value at a rapid clip. When it gets to fair value - not high - a lot of the smart money that's in here sells out and pushes it back down to a discount. It's a strange situation and I'm not sure what to make of it.
<< Those that actually bought at the fair value at the beginning of the year would have earned over a 9% return if they sold today at under fair value. And this period included the deepest, longest bear market since the great depression. Those who had plenty of opportunity to sell at fair value or above in the fall would have earned an approximate return of 12% for 10 years. >>
Time after time you shock me, just amazing. Can you name me one stock where you couldn't make money if you bought it cheap and sold it high, including Enron, Worldcom, and EVERY f--kn penny stock that EVER traded ? IF Buffett gave you the secret password to the madrassa he really is a total fraud. YOU can do much better, keep cherry picking highs and lows and telling us how much you can make. Did the f--kn Foundations SELL at 5 k ? IF the worlds greatest investor didn't know 5 k was high WHO da f--k would know ,YOU ? Get REAL my friend.
<< both growing the business and providing us with clear financial information. >>
Come on sharpy get real old friend. Since old school claims sales by the Foundations are not material whats the f--kn secret, why not disclose the 10b5 plan, why not have the Foundations file FORM 4s, whats the secret? BRK is close to my buy range, I want DISCLOSURE not worthless interviews with the B cup !
Here are some additional facts:
1. BRK stock sold for about $46,000 in January, 1998. Under the two column method, BRK as a business was valued at about $44,000. So the stock price approximated business value at the beginning of 1998.
2. By early July, 1998, the stock sold for about $78,000 a share...up about 70% in 6 months (think maybe the stock was just a bit ahead of itself?).
3. Anyone who bought the stock at $78,000 a share in July, 1998 screwed up by way overpaying for the stock. And 10 year returns from that date are marked off this way overvalued number. Its each shareholder's responsibility to buy at/or below fair value and sell at/or above fair value. Its management's responsibility to grow the value of the enterprise enough to earn a fair return on the shareholder's capital. In addition, its management's job to fairly report the results of operations so shareholders can calculate fair value...Buffett does this in every report! He practically holds the crayon for you while you draw the picture. But some people decide not to listen to him, screw up, and then blame everyone but themselves.
Those that actually bought at the fair value at the beginning of the year would have earned over a 9% return if they sold today at under fair value. And this period included the deepest, longest bear market since the great depression. Those who had plenty of opportunity to sell at fair value or above in the fall would have earned an approximate return of 12% for 10 years.
Buffett is doing his job very well...both growing the business and providing us with clear financial information. He continues to add value to the enterprise at more than a reasonable rate. Those that are complaining need only to look in the mirror to find the reason for their lack of investment success.
Just the facts.
Some people don't understand the difference between the stock and the business.
They think the stock is worth whatever the current quote is. It's good to compete with these people in the stock market.
Any company's stock price is way too volatile to be used as an accurate value of the business at all times. Sometimes the price is right and sometimes its wrong...knowing the difference makes all the difference in the world (price is what you pay...value is what you get). Knowing how to value a business, working within a margin of safety, and not getting pushed around by Mr. Market, will decide your fate in the investment jungle. Based on your answer, you are currently being stalked and will be eventually torn to shreads.
<<And the measure of value is the stock price. >>
head back due south,
take a left at the 2nd stoplight,
go about 1.5 miles,
Take a right at the burger joint on 41st,
Take the next 6 lefts,
That's the message board you want.
Hanging on to BRK at 150K turns out to be a big trading mistake I made. This stock has just seen the best days of percentage growth according to Buffett himself. The laws of large numbers mean lots of large losses in the Super Cat and Cat insurance - those are really large numbers - and then there are these derivative losses smashing smashing smashing earnings each and every quarter with no end in sight and all the explanations in the world about how it's not cash losses can't make Market feel any better because he's very depressed, 20 lbs overweight, and he has a pimple and BRK is terrible terrible it stinks it's down Market hates it and hates it and more derivative losses coming and so it must be like those banks and those investment banks with losses losses and the BUD deal won't help this quarter in this house of pain. The financials - many of them - are insolvent and after all BRK is a financial of a sort. We're all freakin' doomed.