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Union Of Fundamentalist Stock Pickers Forum > Berkshire Hathaway

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microcaps

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Posted January 10, 2008 (03:37PM)

What do you think about Berkshire Hathaway (BRKA)?

Honestly, I think it is a bit pricey today (on PE, EVA and DCF) but I like the long term prospect of that company.   They have awesome leader (not only Warren Buffett but their subsidiary leaders), great corporate culture, conservative approach when valuing business, great products, very nice cash flow generating divisions, and huge cash balance which is ready to take opportunity out there.

But size could be a concern.  However, they just recently (last year) starting to look outside US so I'm guessing they will have broaden their pool of companies that they can invest which should help to find place to deploy their cash before any pressing need to return their cash back to shareholders.

I wonder what else will he do with this mortgage and lending meltdown (if he is going to touch some of the opportunities out there)
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UPod

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Posted January 11, 2008 (03:03AM)

If I had the cash,  above all others,  the one stock I would want to own is Berkshire Hathaway.  It's the kind of stock you can own and sleep well at night.    I have wondered lately what will happen to the stock once Warren Buffet no longer graces this planet.   I have to think part of Berkshires stock price is based on the fact Warren runs the show.    Do you think their stock price will take a huge hit once Warren is no longer with the company?

With the market turning south the way it is,   a lot of companies are starting to become under valued and oversold - as least domestically.   My guess is that the Oracle is in a crouch position right now just waiting to pounce on all sorts of deals - with both public and private companies.   With the credit crunch that's taking place,  a lot of private companies are having problems getting good financing terms for both new lines of credit and for refinancing existing debt.  That, along with the slowing economy,  is going to add a lot of businesses to Warren's watch list.
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microcaps

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Posted January 13, 2008 (03:45PM)

I personally think that when Warren die (or alive but stepped down), the stock will take a hit but it will bounce quickly because there are so many people (and fund managers) are waiting on the sideline (to buy or add more) for that opportunity.  But remember that Warren only runs te investment part of the business, there rest of the operation and subsidiary are run by other people but it will get impacted because Warren is the culture of the company.. 

The meltdown in the financial markets surely give Warren and Berkshire a lot of opportunity to deploy teir cash (they have been waiting for a recession and have invested abroad due to the state of US trade deficit IMO). He got $40-$50B waiting to be invested and an additional ~$10B each year from net income to be invested as well..  and just like you said, he started making some deals.. but I tink he is expecting for more decline (the worst on the lending meltdown is still yet to come IMO) and hence he is still waiting for some otheropportunities to show up..

Having said all that, I've learned a lot from Warren and we (fundametal iinvestor) are lucky to have people that we can learn from.  I've been going to Berkshire sareholder meeting (and also take my friends along) and will continue to go (I guess as long as Warren still leads berkshire and still is making sense)
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victork

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Posted February 13, 2008 (08:34AM)
Try BRK.B, it is much more affordable.
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GS751

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Posted February 26, 2008 (09:02AM)
Do you think their stock price will take a huge hit once Warren is no longer with the company? Yes and I will be waiting with cash in hand to back the truck up.
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pirate

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Posted March 14, 2008 (05:45AM)

Over the last 20 years from 1988 - 2007 BRKa have on average returned around 21% per year. So as soon as the BRKb stops declining, hopefully around $4100, I'll buy one of these puppies for my kid who's going to be born in 6 weeks. Then I'll hope the shares keep on performing at that rate, and in 18 years, they should be worth over $126'000, which should be enough to put him through college. If the return is only 18%, it's still going to be over $80'000.

Should Buffett kick the bucket and the shares tumble, I would use it as an opportunity to buy more shares. As far as I can see, Buffett does two things: 1) Every year he writes a letter to each CEO of his companies, but otherwise he doesn't interfere much with their business, unless they seek his advice. More than anything he gets his businesses to adopt his values of what he thinks is a good business. 2) He knows how to identify which companies to buy. I'm sure these skills will live on after his passing through his successor, whoever he may be.
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apalmer

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Posted December 25, 2008 (01:10PM)
I just started reading The Snowball Effect, a book about Buffet's life, and philosophy. I cannot recommend it yet, first I need to read more, but it has received some great reviews just look online.
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ATHiggins

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Posted February 10, 2009 (02:06AM)
How much is enough BRKB to own if you want to be a millionaire in 20 years? I know BRKB is going through a tough time right now and tradeking rated it a "HOLD" instead of its previous "BUY" rating. I currently own 7 shares of BRKB at a average unit price of 3,624.24 per share my goal is to own between 15-30 shares of brkb and get the average unit price down to about 3,000.00 by buying more shares at a cheaper price I think brkb is going to drop to around 2500-2600 within the year but I plan to keep on buying brkb until it rises above 3400 per share.


But my main question is do you think in 20 years BRKB is going to perform as well as BRKA has and if so what do you think the price per share will be in 20 years if you were to take an educated guess?

I know someone took an educated guess on a previous post but I just dont know if in 20 years that BRKB is going to gain an average of 18% per year.

Also what price do you think is too pricey to buy more BRKB at I am a newbie to trying to predict future gains or losses but I just want some feedback from you guys about this because I currently put all my money I get into buying BRKB and I am just wondering if you think its a good idea to keep buying even though the stock is dropping and staying around 2900-3100 per share.
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microcaps

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Posted February 11, 2009 (01:43AM)
BRKB will perform similar with BRKA (1 BRKB is 1/30 economic interest of 1 BRKA).

In my honest opinion, BRKA/BRKB book value will grow about 7-8% per year in the next 20 years. The stock price will be more complicated to predict as it will depend on the PE multiple that people will give at that particular time (whether 20 years from now we will be at a recession or a bull market, butin general you should expect at the most 10% annual return from BRKA, my guess it will be 7-8% just like the book value)

I think the price is quite good at this point (after the huge drop the past year) as their business is solid and they are diversified business/conglomerate and not only Financial/Banks. Though I don't know if insurance business (which is a big part of their business) will be impcated next (I would bet no because Warren/BRKA has  been conservative in his underwriting policy)