Corner of Berkshire & Fairfax Message Board

General Category => Berkshire Hathaway => Topic started by: Parsad on February 19, 2009, 08:57:58 AM

Title: Buy Berkshire!
Post by: Parsad on February 19, 2009, 08:57:58 AM
Here's another of your twenty punches.  My friend John Zemanovich and I were talking yesterday, and we think we are now getting very close to the same point in time when Buffett last issued a statement that he would be buying back shares.  My estimate is that in the $72-75K range would put it in the same ballpark as in 2000, when the stock was in the $43-45K range and Buffett announced the buyback offer.  The next time it gets this cheap will be sadly when our dear Warren leaves this earth.  We'll see if Buffett says anything in the letter this year if prices stay where they are.  Cheers!   
Title: Re: Buy Berkshire!
Post by: zarley on February 19, 2009, 09:16:11 AM
I've been watching the prices today . . . wondering what's up.  $2,500 for the B's seems pretty crazy.

I agree about the low $70k range on the A's being close to a buyback price.  Recall Munger's actions in Nov when it got this low.  I believe he sold some A's to his family members around these prices, in a sort of pre-emptive distribution of his BRK holdings. 
Title: Re: Buy Berkshire!
Post by: Grenville on February 19, 2009, 09:18:43 AM
Munger's Transacation

Class A Common Stock    ( 1 )   11/20/2008      S         2,000    ( 2 )    ( 2 )   See footnote 1    ( 1 )   $77,500 ( 3 )   13,181   D   

http://www.sec.gov/Archives/edgar/data/1067983/000118143108063602/xslF345X03/rrd224408.xml (http://www.sec.gov/Archives/edgar/data/1067983/000118143108063602/xslF345X03/rrd224408.xml)
Title: Re: Buy Berkshire!
Post by: benhacker on February 19, 2009, 09:19:52 AM
Berkie is down because of the underlying stocks are down (if I had to guess) that he owns.  

Lots of wild stuff today.  Wells Series L preferred just dropped 20% today to 35% of par... 20+% yield.

For those who kept powder dry, I envy you a LOT!

Best of luck to everyone navigating this, now is the time.

Ben
Title: Re: Buy Berkshire!
Post by: berkshiremystery on February 19, 2009, 09:25:16 AM
Sanj,...

I agree with you & zemanovich, the last time when i bought some brk was in the year 2000.
brk is quite a bargain at these prices now,... anyway it could drop a little lower.
but i'm not becoming a fortune teller for your amusement  ;D
Title: Re: Buy Berkshire!
Post by: zarley on February 19, 2009, 09:26:09 AM
Munger's Transacation

Class A Common Stock    ( 1 )   11/20/2008      S         2,000    ( 2 )    ( 2 )   See footnote 1    ( 1 )   $77,500 ( 3 )   13,181   D   

http://www.sec.gov/Archives/edgar/data/1067983/000118143108063602/xslF345X03/rrd224408.xml (http://www.sec.gov/Archives/edgar/data/1067983/000118143108063602/xslF345X03/rrd224408.xml)


Thanks Grenville, that's the one I was thinking of.  
Title: Re: Buy Berkshire!
Post by: StubbleJumper on February 19, 2009, 09:49:20 AM
Yeah, over the past two days I've been all over the WFC-L preferred shares like a fly on s&^t!

Thanks OEC!

SJ
Title: Re: Buy Berkshire!
Post by: misterstockwell on February 19, 2009, 10:11:57 AM
Has anybody gotten the definitive answer on just what the WFC-L converts into?
Title: Re: Buy Berkshire!
Post by: JAllen on February 19, 2009, 10:41:54 AM
I believe Munger's transaction was a gift and doing it at a lower price would reduce the gift tax for the recipient, of course.
Title: Re: Buy Berkshire!
Post by: Kentinvestor on February 19, 2009, 11:22:05 AM
From the IRS website:

"Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement."

Do you suppose Charlie made those "special arrangements?"
Title: Re: Buy Berkshire!
Post by: Partner24 on February 20, 2009, 07:15:46 AM
GE, BRK and WFC are all down significantly. I guess that those who would like to buy them are salivating now.

Title: Re: Buy Berkshire!
Post by: Mungerville on February 20, 2009, 07:22:38 AM
I just bought some BRK.  Again this year, I remain fully hedged against equity markets however.
Title: Re: Buy Berkshire!
Post by: FlyingArrow on February 20, 2009, 07:33:22 AM
GE, BRK and WFC are all down significantly. I guess that those who would like to buy them are salivating now.



I just picked some GE up at $9.30

Sniffing at some BRK now.

Interesting times.
Title: Re: Buy Berkshire!
Post by: Mungerville on February 20, 2009, 07:44:04 AM
I think that on an unhedged basis, there is probably more money to be made in select corporate bonds more so than equities.  In equities, I am sticking with highest quality stocks yet staying hedged as I believe quality will outperform.
Title: Re: Buy Berkshire!
Post by: FlyingArrow on February 20, 2009, 07:45:50 AM
I just bought some BRK.  Again this year, I remain fully hedged against equity markets however.

Just picked up some BRK.B as well. Too good to pass up.

Mungerville, if you don't mind me asking what vehicle have you used to hedge and what do you think is the least expensive hedge at this juncture?
Title: Re: Buy Berkshire!
Post by: daveyx on February 20, 2009, 07:56:26 AM
Hi,

Check which is cheaper if you are buying - the B shares were 6% cheaper than 1/30th of the price of the A shares a few minutes ago. Buffett recommended you buy the Bs if they are 2% cheaper than 1/30th of the price of the A shares ...

Dave
Title: Re: Buy Berkshire!
Post by: Mungerville on February 20, 2009, 08:06:12 AM
In terms of the puts, they are all expensive.  I re-loaded a 10% out of the money position on XLY (consumer discretionary) in December and doubled down at 15% out of the money in late December/early January.  Even with what now looks like great timing, I have made only marginal money given time value erosion.  Its going to be tough to make substantial money in puts/hedging this year buy I hope to make a bit.

Shorting or the option equivalent of deep in the money puts is the cheapest but if the markets turn you can get burnt pretty quickly.

There is no good way at this point.  Maybe try and hedge when opportunities arise in individual securities you hold as opposed to index puts at this point.  It is very costly and some would argue there is minimal cost-benefit rationale for a long-term investor.
Title: Re: Buy Berkshire!
Post by: arbitragr on February 20, 2009, 09:05:36 AM
Berkie is down because of the underlying stocks are down (if I had to guess) that he owns.  

Lots of wild stuff today.  Wells Series L preferred just dropped 20% today to 35% of par... 20+% yield.

For those who kept powder dry, I envy you a LOT!

Best of luck to everyone navigating this, now is the time.

Ben

Indeed it is. Picked up some BRK/B for 2280. What a bargain!  :)

I've been so busy just analyzing all the opportunities this week doing extra work that I haven't had much time to post!!!!   :o ;D

Yeah, but generally now is a good time to take a position in a good quality, safe, well run institution like BRK, or at least the time to be looking. I have been bullish in conservatism in the recent months, i.e. holding cash etc. but if you start allocating some capital throughout the year in good quality institutions it's hard to do wrong over the next 2-5 years.

All the best everyone.

Title: Re: Buy Berkshire!
Post by: arbitragr on February 20, 2009, 09:18:41 AM
I think that on an unhedged basis, there is probably more money to be made in select corporate bonds more so than equities.  In equities, I am sticking with highest quality stocks yet staying hedged as I believe quality will outperform.

Bonds are indeed good value.
However for the average investor the bond market is almost off-limits, since the best junk bonds are usually over the counter and not readily traded via discount brokers.