Berkshire-Hathaway - The Next Stock Ready to POP?
OK, I am kidding, but only just barely. I put BRK into my Fool portfolio a couple of weeks ago, mainly out of curiosity and to give me an opputunity to watch and study it. At the same time, I added several other stocks. Then, I noticed something amazing: the other picks were down 10 or 20% after a week or so, but darn if BRK was UP by the SAME %. Holy cow: I immediately thought that I must add it to my real portfolio. Then, I noticed something interesting: BRK has 2 classes of shares. The ones usually quoted by the media were the A's, which is $100k per. I was not aware that there was a class B, which is 'only' $4K, which puts it in the reach of us ordinary mortals.
Problem: at that point, I was 100% invested and had no cash left over. I ended up dumping the last of my high-tech stocks (JAVA) and the Calif-Muni-Tax-Exempt-Fund. Lest you think I am rich, I barely was able to scrape together enough cash for ONE share of B. I have only had it for a week or two, but I am already up by $600 on an initial investment of $4K: what, are you kidding me? How many of your stocks are UP by this amount in the past 2 weeks?? In fact, BRK-B is within 10% of not just a 52 week high, but an ALL-TIME HIGH. Guh?
Question: are you THAT sure that your personal investing acumen will out perform BRK-B? Are you that sure that, a decade hence, BRK-B will not also be worth $100k per? If I put the correct sort of batteries in my HP 12C calculator, Buffet invested $10B in 10% warrants, so he will get $1B per year in dividends; plus, if GE goes to say $44 per share, he can cash in his warrants get $3B in profit, just because he a nice guy who lent GE $5B when the sledding got tough.
OK, the BETA of BRK-B during the next stock market rally may actually be less than 1.0. Right now, my money is on the Oracle of Omaha.