W. E. Buffett wrote:
Chairman of Berkshire, commented: "The merger (General Re)
will bring more than $80,000 of investments
Berkshire for each Class A or Class A-equivalent share
issued. That's beneficial, being nearly double the
level, or, put another way, the merger brings more than
$24 billion of additional investments to Berkshire.
Will it double the BRKA? When?
<<you have my e-mail address, come on and
help me with some HTML...>>
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For any of you who
haven't been following, greg says his investments
outperform WEB's. I say he's a liar and/or phony. If his
investments outperform WEB's, that would make Berkshire the
laggard. What kind of a dope keeps junk managed by a man
he hates when he could be making big money by
himself out in the wide, wide world?
If it turns
out that I'm wrong, I'm going to apologize and see if
he will let me subscribe to his newsletter.
<web would rather have cash (grn's cash) than
brk stock. web is effectively selling without paying
capital gains tax. (this guy is smart.) if there were 3
or 4 grn's out there he might be happy to unload all
of brk for cash>>
I do not
understand how buying GRN for stock equates to Buffett
selling out. Berkshire gets GRN's portfolio along with
its topnotch reinsurance people. Buffett has his
stake in Berkshire cut from let's say 40% to 33%, but
the company is worth more by a similar proportion.
Buffett's stake is no more liquid than ever, and consists
of no fewer BRK shares. Buffett says that the
combination provides strong benefits to the reinsurance
business, thereby increasing the intrinsic value of the
firm. IMO, previous posts that said Buffett used
overpriced stock to buy an undervalued business are pretty
much on target. Could you elaborate on your viewpoint
brk is going down because web would rather have
cash (grn's cash) than brk stock. if he wants to trade
brk for cash it doesn't make sense (unless he's
wrong) for us to trade cash for (buy) brk. web is
effectively selling without paying capital gains tax. (this
guy is smart.) if there were 3 or 4 grn's out there
he might be happy to unload all of brk for cash,
like he did when he sold out prior to '73-74 bear
market. i'm long, and buying brk, but i remember where i
was in 1987 when larry walked in the door and said
"the dow fell 500". that would be @ 2500 from today's
<<The A are just as liquid and trade at 30
times the B shares. They move in almost perfect
lock-step. B have 1/30 the economic value and 1/200 the
voting power. A also have the ability to direct gifts to
charities if they are held in the owner's name and not
street name. >>
Yep, and right now you are
only losing $155 per A share for the privileges.
Earlier, when the trend was positive, this number was
approaching $400. That was when the BRKA holders were
BRKB at 2522
BRKA at 75505
You may want to look into
buying A's and converting to B's at your leisure,
although its not that attractive at the moment.
You are right, but you forget that everything is
The 'stuff' he bought was cheap relative to the rest
of the market. Instead of the price coming down,
what if everything else went up by the same multiple?
Pay less for a company, or print tons of free money
and use it instead. With free-Brk-money GRN was
cheap. So there should be plenty of potential with
GRN... besides, he used funny-money to get $22 billion
in real money. WEB is getting ready for a huge
end-of-party sale. As long as he can keep his float, I don't
think WEB cares whether he can grow GRN ...
I understand your thesis about the boomers piling
in, but liquidity-driven markets get divorced from
value and always end badly. For example, you could read
in the Wall Street Journal in the 1980's that the
Japanese people revered their stocks like ancestors, never
sold, and would always plow their 20% national savings
rate into stocks.
Curious no one has attempted
to reply against my question in the previous posting