Berkshire Hathaway

[Thremp]

Cause there are better investments?

[captZEEbo]

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So why Isn't everyone buy the stock? It is one of the most consistent returners out there.

[/ QUOTE ]maybe it's overvalued? Just b/c berkshire hathaway makes money, doesn't mean buying berk hath stock is +EV

[almostbusto]

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[ QUOTE ]
So why Isn't everyone buy the stock? It is one of the most consistent returners out there.

[/ QUOTE ]maybe it's overvalued? Just b/c berkshire hathaway makes money, doesn't mean buying berk hath stock is +EV

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yes, it does.

though you are probably +EV to mean maxEV, which this forum seems set on being interchangeable, in which case then you are right.

[ilikeaces86_]

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So why Isn't everyone buy the stock? It is one of the most consistent returners out there.

[/ QUOTE ]maybe it's overvalued? Just b/c berkshire hathaway makes money, doesn't mean buying berk hath stock is +EV

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Their class A stock has averaged like 23% return since inception hasn't it?

[Vang]

Yes, but their potential for such return goes down the bigger they get. Warren has a lot of cash sitting around because he isn't seeing the kind of investment opportunities he wants. This means he isn't going to get the same kind of returns he got in the past.

[hlacheen]

I own some Berkshire. With the size of their capital base it will be pretty unlikely that the company manages the same phenomenal performance of the 1900's, but they will still mostly beat the market. I think the stock is undervalued at the moment. Some people are also fearful of Warren Buffet passing away.

[AvivaSimplex]

Price to book value is greater than one. That means if you want $100 worth of Coca Cola stock, you could pay $100 in the market, or you could pay $160 by buying BRK. Of course it's more complicated than that, because BRK also is the sole owner of many entire businesses, but in a nutshell, that's why it's not a no-brainer to buy.

If price-to-book were 1, lots and lots of people would buy, until the price rose and P-B was greater than 1.

[hlacheen]

http://www.berkshirehathaway.com/letters/2006ltr.pdf

2006 Annual Report... something you should read if you are interested in investing in Berkshire.

[Thremp]

ilikeaces,

They also pay no dividends, which reduces gains vs. other blue chips.

[ilikeaces86_]

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ilikeaces,

They also pay no dividends, which reduces gains vs. other blue chips.

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From what I understand the reason they don't have dividends is that Buffett believes he can do better with that cash by reinvesting it into the company then paying it out to stockholders. When he does this he makes the company grow even more which in turn will lead to an increase in stock price. There is a reason why BRK.A Is selling for over 100k a share.