[pig4bill]

Nah, you're wrong on a number of points. First of all, a lot of people invest for the long term, so any forecast of earnings more than a few quarters out is pure guesswork, even by the company itself. So some people are guessing or hoping for higher earnings than others for the next 2 or 3 or 5 years.

Additionally, people are guessing that different earnings multiples are what a stock is "worth". One guy may think 15 times EPS is right, another 17, and yet another 20. Who's right? None of them, all of them, it doesn't matter.

Some people are playing short-term movements. A stock catches an upgrade and momentum players may jump on it, hoping to take down a quick point. They push it over some technical barrier, and now the T/A guys jump on it. Have earnings or the company's prospects changed? No, but the stock moves nonetheless.

There are probably dozens of other examples why a stock may go up or down, yet "everyone knows" all the public information.

Also, it doesn't make sense to compare what Buffet does to what investors may do. He is not an investor in stocks, he is an investor of companies. Berkshire is not a mutual fund that counts on capital gains and dividends. It is a holding company. When he buys a company, the earnings are his, whether the stock (if it was trading) goes up or not. When he doesn't fully take over a company, he often buys a very large stake that permits him to have significant influence over how they operate. That's why comparing Berkshire's returns to mutual funds is stupid. A mutual fund can't invest in a company and get them to grow their earnings.