Berkshire Hathaway at 1.04 Times Book Value

[MediumTex]

As I recall, Buffett always said he felt that 1.5 times book value was a fair price for Berkshire Hathaway stock.

It might be cheap right now at 1.04 times book value. 

Then again, it might be cheaper tomorrow.

[Liz L.]

I take it you're not buying.

Or are you?

[cabronjames]

isn't there some notion that Berkshire does NOT pay dividends?

If I plug their ticker BRK-B into Yahoo Finance's Historical Prices, there is NO div history, going back to 1996.

The combo of BRK-B
1 not paying dividends
2 being at a unusually low book value

leads me to hypothesize that BRK-B could be a good option for filling out part of STOCK allocation, for those TAXABLE investors who are short on tax-sheltered (401k, IRA, etc) space.

For GOLD, I have read on this msg board about the notion of
holding the physical buillion as a "core long term holding"
using the tax-sheltered gold ETF (such as SGOL) for rebalancing

similarly for STOCK, couldn't BRK-B act as a "core long term holding" in a taxable account?

[MediumTex]

I'm not buying any, and Buffett's age is obviously a risk factor, but it just looks like it might be a buy for someone interested in starting a position.

Berkshire has never paid a dividend.

[craigr]

Berkshire has never paid a dividend.

Which is strange because Buffet is such a huge fan of higher taxes. You'd think he'd be the the first one to belly up to the bar and pay a fat dividend so that income could be taxed in the way he so desperately wants.

[smurff]

The B series shares used to be 30-1 of the A series shares, but that's more recently be split down to 300-1 (?).

Clive, the B-series shares were split after Berkshire acquired Burlington Northern, a railway/transportation company.  At the time the B-shares were trading for between $3000 and $4000 (the A-shares over $100,000).  Burlington Northern was part of the S&P500, and its purchase would make Berkshire-Hathaway part of the S&P500.  Historically Berkshire had always resisted becoming part of indices and having to manage their share price accordingly. 

Because there are thousands of hedge funds, pension funds, S&P500 Index funds and other large funds that invest in S&P500 stocks, it was decided that a share price in the $4000 range would be too unwieldy to be included in the index.  So in the run up to the acquisition, the B-shares were split, and after the purchase, the newly split shares were made part of the index.

[moda0306]

Craig,

Buffett's a fan of higher taxes on the uber-wealthy investment income for societal/philisophical reasons, and it's part of his political/economic philosophy and opinion.  As a politically moderate (or independent) tax-schemer, I can speak to the difference of operating effective investing strategy for one's self and clients, and articulating one's view on macroeconomics, politics, and distributions of wealth.  This is not unlike you or I being against the child-tax credit, but taking it anyway on our tax returns (hypothetical)... or investing in government bonds while being against our deficit spending and government overreach.

I'm sure you know this, but I find it to be slightly improper to try to tie one's dedication to their fiduciary duty to their clients and even what to do with their own money to how they see society being best organized for wide-spread prosperity vs wealth for the few.

Further, for the most part, Buffet puts his money where his mouth is.  He has given and continues to give vast sums of money to charity.  He just sees that trying to do that with his clients' wealth is highly inappropriate, and that it will take a lot more of what he's doing to help the middle-class. 

I would think that people are not only allowed but encouraged to fairly maximize their own financial position and fully serve their clients, and then voice their political opinions separately, even if they'd not benefit personally from those opinions being acted upon.

In fact, I trust guys like Buffett a lot more than guys like Forbes, though I disagree with a lot of both of their assertions on where we are headed or how to invest, because he's not conveniently lobbying for things that help him and/or his clients.

[TripleB]

I had been holding off on BRK due to the Buffet risk of what would happen to the stock when he dies. I even thought about putting some money aside for the inevitable crash after his death.

The affect Steve Jobs stepping down from Apple had initially been 5% but reduced to virtually nothing in one day. This leads me to believe the same may occur to BRK - as though the risk of Buffet dying is already priced in, just like the risk of Jobs leaving was priced into Apple.

BRK has underperformed the SP500 for the last couple years. It might be a good time to buy.

[possum]

I'm not buying any, and Buffett's age is obviously a risk factor, but it just looks like it might be a buy for someone interested in starting a position.

Berkshire has never paid a dividend.

FWIW, BRK paid a 10 cent dividend in 1967.

[cabronjames]

As a politically moderate (or independent) tax-schemer, I can speak to the difference of operating effective investing strategy for one's self and clients, and articulating one's view on macroeconomics, politics, and distributions of wealth.  This is not unlike you or I being against the child-tax credit, but taking it anyway on our tax returns (hypothetical)... or investing in government bonds while being against our deficit spending and government overreach.

Great point moda.

To analogize with sports, if Buffet was a NFLfootball coach,
-role as citizen-
he might see data on vast concussions of former & current players, & lobby in the offseason for a rule change for player safety.  The Government is the referee & rulemaker.  Without the Government as referee, there is no free market capitalism - there's cartel-like markets like say Somalia or the Mexico Narco-cartel industry.

vs.

-role as business officer & individual investor-
But until Coach Buffet is successful in getting the rule changed, he still is obligated to instruct his top/beast Jarred Allen-type Defensive Back attempt to execute excessive medieval brutal sacks on the other team's QB

[murphy_p_t]

Further, for the most part, Buffet puts his money where his mouth is.  He has given and continues to give vast sums of money to charity.  He just sees that trying to do that with his clients' wealth is highly inappropriate, and that it will take a lot more of what he's doing to help the middle-class. 

I would think that people are not only allowed but encouraged to fairly maximize their own financial position and fully serve their clients, and then voice their political opinions separately, even if they'd not benefit personally from those opinions being acted upon.

In fact, I trust guys like Buffett a lot more than guys like Forbes, though I disagree with a lot of both of their assertions on where we are headed or how to invest, because he's not conveniently lobbying for things that help him and/or his clients.

Buffett is highly suspect from my view. Some are the reasons are, in no particular order:
1 he talks against gold ownership in the midst of a 10yr bull market
2 he advocates policy which hurts small businesses  for his own gain...he encourages government to prevent others from becoming wealthy...see http://fskrealityguide.blogspot.com/201 ... -more.html
3 his "charity" might be considered more imperialism, such as his support for population controllers in the 3rd world

This link documents some efforts to blunt some of the "charity" that Buffett funds
http://www.lifesitenews.com/news/archiv ... y/02050705

[murphy_p_t]

In fact, I trust guys like Buffett a lot more than guys like Forbes, though I disagree with a lot of both of their assertions on where we are headed or how to invest, because he's not conveniently lobbying for things that help him and/or his clients.

Moda, i'm thinking you didn't see this...

http://truthingold.blogspot.com/2011/08 ... ac-is.html

[Jan Van]

Does anybody have insight into BAC's operations? The article linked to by murphy_p_t above says

[quote=THE GOLDEN TRUTH]Buffet's comment is that "BAC is plenty profitable."  Anyone who knows basic accounting can look at BAC's financials and see that all the profits are generated by GAAP accounting manipulations are not based on cash economics.[/quote]

Now that part I believe, because mark-to-market accounting was suspended under pressure from those big banks. What I'm wondering though is, how is the banking part of BAC doing. What if we cut out Countrywide and look purely at the banking part? Reason i'm asking is, somewhere else I read the banking part is doing fine, but that's the part where they'll cut 30,000 jobs to make up for all the Countrywide and other such mortgage losses. Don't know how bad BAC's mortgage business was going before they bought Countrywide though...