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JimVanMeerten (62.12)

What does Buffet have left?

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September 12, 2011 – Comments (3) | RELATED TICKERS: BRK-B

COMPLETE ARTICLE AND GRAPH

I have been a fan of Warren Buffet and his Berkshire Hathaway stock (BRK.B) almost since the day I started getting interested in investing.  Through thick and thin Warren has continued to make money by buying established companies that have executed a solid business plan in the past and are expected to continue profitable operations in the future.  He tries to buy them at a discount and hopes to hold them forever.  He has made a lot of money for others and a killing for himself.  I wouldn't bet against him but I think you can do better on your own but only of you are willing to work a disciplined plan.  During the last 3 1/2 year period the general market as measured by the Value Line Index has beaten him soundly as this Barchart graph shows:

Barchart technical indicators:

1 - 80% Barchart short term technical sell signal

2 - Trend Spotter technical sell signal

3 - Below its 20, 50 and 100 day moving averages

4 - Lost 19.99% off its 1 year high vs. the Value Line Index loss of 17.56%

5 - Relative Strength Index is 46.99 and climbing slightly

6 - Barchart computes a technical support level at 69.06

7 - Recently traded around 70.16 which is below its 50 day moving average of 73.22Recent price movement in the last 28 trading sessions:


Summary:  Berkshire Hathaway class B shares (BRK.B) are suited for long term investors who want to use a value investing approach for the long haul and realize that they are paying a premium to let Mr Buffet invest for them.  Since today's price is at least 20% cheaper than it has been in the past year now is a good entry point.  Investors that want to stay personally involved and continue a hands on approach should pass on these shares.


Jim Van Meerten is a Marketocracy Master

3 Comments – Post Your Own

#1) On September 12, 2011 at 11:53 AM, miteycasey (30.59) wrote:

Wow...you didn't start investing until after BRK-B was issued.

 

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#2) On September 12, 2011 at 12:54 PM, BillyTG (29.25) wrote:

Interesting. I bought some B shares in the 60s and sold in the low 80s, because I figured that was about the best I would get in that timeframe.  Buffett himself has said that anyone young and smart should be able to get 50% yearly returns and do much better than he can trying to manage billions.  It's just so gangly at that size that his options are limited and he's reduced to many sweetheart, government-backed deals.

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#3) On September 20, 2011 at 2:27 PM, foolishbk (< 20) wrote:

It appears to me that Warren Buffet has gone seriously round the bend.  He always claimed that he was not an economist.  When he turned into Barack Obama's sock puppet, I cried and sold.  At sixty-seven, I'm not nearly what I was at forty-seven.  I don't think he's anywhere near what he was at sixty-one.

I'll be buying again when he and Charley are gone and BRK has taken the drop that will happen then.  I do trust that Warren has put in a good successor.   

 

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