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Politics : Ask Michael Burke

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To: Simba who wrote (68474)	10/1/1999 9:38:00 AM
From: Freedom Fighter	Read Replies (1) of 132070

Simba, >>He was also asked if berkshire is a good buy at these levels and he said that he would rather buy stocks like Gillette directly than indirectly buy them at a premium thro' BRK.<< The people that view BRK as a mutual fund don't understand the company. There was a time when it did sort of resemble a mutual fund. But now it is an insurance operation with large investments in equities, bonds, and 100% owned operations. It has enormous float generating ability that is constantly adding to the investment portfolio. And that float is contantly going into the hands of a master investor. So even without considering the enormous value of the 100% owned operations that are worth much more than there stated book values, the insurance operation's float generating ability has tremendous value. Over a long term basis, BRK's operations generate investable funds at a negative cost because of the underwriting profit. That means people are paying BRK to hold their money and Warren gets to pocket the investment profits. That has almost incalculable value. You simply can't view BRK's value as a snapshot of it's equity holdings and be anywhere close to what it's worth. Some people on Wall St. still haven't figured that out. Wayne

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