Blogs & Comment

Buy Berkshire Hathaway?

Many people are saying now is a good time to buy shares in Warren Buffetts Berkshire Hathaway. They are down about half from their peak and are trading below book value. Get in now, say fans. Look what happened when Berkshire took a beating during the dot-com era: afterward, the shares tripled.
You can buy the stock for its liquidation value, paying zero premium for the great management and fairly dependable earnings stream . This may not happen again for decades, said one.
But as one doubter said in the comments section: If you buy Berkshire’s stock, what happens to your investment on the day Buffett drops dead? The Oracle is nearly 80 years old and wont be around forever. His absence from Berkshire could leave a rather serious gap.
There surely must be a premium in the shares simply because of Buffetts reputation. That could come out of the price. Moreover, Berkshireappears to be an extension of Buffett: its been his show. Im not sure if his replacement will have quitethe same magic. There could well be a rally along with the market, but the long run might be a different matter.