berkshire hathaway

[technologic]

do you have a link to the article?

rest,
thanks for the clarification.

[RicoTubbs]

As others have alluded to, if you're concerned about volatility, you don't care about beta. Just download the closing prices from yahoo and take the standard deviation of daily/monthly returns and compare that to the same measure calculated for spy or vti. (This won't tell you what future volatility will look like, of course, but it's better than nothing.)

The very low beta indicates a low correlation with the market, not a lower absolute volatility than the market.

[DiamondDave]

1) Berkshire's huge cash position is not a problem. Without all that cash, Berkshire wouldn't be able to charge such handsome premiums for underwriting such big risks. I like having the use of >$50 billion of cheaper-than-free float, and we wouldn't have it without a large, liquid balance sheet. Besides, all that cash provides a great deal of flexibility in today's volatile markets. ^^

2) Yes, Warren is not as young as he used to be. But we shareholders, as a group, understand business and human nature pretty well. We have a much-better-than-average chance of electing directors who have the shareholders' best interests at heart, will hire capable executives, and put incentives in place that will encourage those executives to maximize the per-share value of the business.

3) Some people think they can measure risk very precisely by computing the variances and covariances of returns using historical data. However, statistical inference is valuable only to the extent that the future will be "similar enough" to the past and only to the extent that the important variables can be quantified. (Einstein prefered to say, "Not everything that counts can be counted and not everything that can be counted counts.") There is no substitute for thought. Don't let them tell you otherwise.

[img]/images/graemlins/diamond.gif[/img] (shareholder since before 9/11 and Hurricane Katrina)

[technologic]

[ QUOTE ]
As others have alluded to, if you're concerned about volatility, you don't care about beta. Just download the closing prices from yahoo and take the standard deviation of daily/monthly returns and compare that to the same measure calculated for spy or vti. (This won't tell you what future volatility will look like, of course, but it's better than nothing.)

The very low beta indicates a low correlation with the market, not a lower absolute volatility than the market.

[/ QUOTE ]

ah yes, now i remember about beta...i should reread my corporate finance notes...