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Fair trade?

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February 05, 2014 – Comments (6) | RELATED TICKERS: FB , BRK-B

I like looking at market caps.

For instance, lately, I've been following Facebook's market cap.

Market seems to suggest that Facebook and Berkshire Hathaway have approximately the same value, at least in market cap.  In other words, if you wanted to swap all of Berkshire's future earnings for all of Facebook's future earnings, it'd be a fair trade.

I understand serious people invest in Facebook, but I just can't take the above seriously.  It makes me laugh every time I think of it. 

6 Comments – Post Your Own

#1) On February 05, 2014 at 1:50 PM, elcid24 (77.54) wrote:

Market seems to suggest that Facebook and Berkshire Hathaway have approximately the same value, at least in market cap.

I think the market cap of Berkshire Hathaway is about $110B higher than Facebook. 

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#2) On February 05, 2014 at 2:23 PM, Valyooo (99.48) wrote:

The market caps of both companies are nowhere close. And although I would rather invest in Berkshire, I bet Facebook has way more customers than BerkshireBerkshire

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#3) On February 05, 2014 at 2:53 PM, elcid24 (77.54) wrote:

I remember in 2010, when the value of Facebook was projected to be anywhere from $20B to $40B.  People were saying the exact same thing, albeit at a smaller scale:

"The value of Facebook is the same as the value of [John Deere, Sysco, Lockheed, etc.] - how absurd!"

Just a few years later, and people would be chomping at the bit to get FB for $20-40B.

Just a few years from now, there's no telling what it could be worth. 

Not long, not short - it's outside of my circle of competence.

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#4) On February 05, 2014 at 4:21 PM, MoneyWorksforMe (< 20) wrote:

It's a joke. And, likewise, I just got a good laugh at Twitter's earning's report. Similar phenonmenon going on with this terribly valued stock. $36 Billion market cap for 0.02 EPS this quarter.

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#5) On February 06, 2014 at 12:09 PM, ikkyu2 (99.10) wrote:

Huh, my stock screeners are leading me astray.  Wasn't a joke; Fool's stock screener reported BRK's market cap as $131B, so did Fidelity's.  I wonder if maybe they were reporting the two different share classes separately.

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#6) On February 07, 2014 at 1:21 PM, Valyooo (99.48) wrote:

Moneyworksforme,

 

it it trades off of growth potential, not current earnings. If everything traded off of current earnings, businesses would fail from the get go 

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