Warren Buffett's picture was in the Wall Street Journal for three straight days last week. If patience is going to be rewarded with a big spike in BRK it is now, and low and behold, here we go. I invested in this thinking of it as a big hedge on a bear market, and it is doing just that. The insurance business is not economically sensitive and is coming out of a big trough, and Buffett is doing his thing with the cash hoard. Its working out exactly as I had hoped. Though I am a Buffett scholar, I am not necessarily a long term holder (since I bought over the last two years, my tax basis allows me some flexibility). All the set up for a big move in the price of Berkshire are forming, and the spike might be in progress. That is a spike I would sell.
Another thought. Anybody notice that the definition of a Buffett stock has become kind of dumb. His actions in this bear market harken back to his relationship with Ben Graham. Coke is a Buffett investment? Well, yeah - at 15. Somehow it became thought of as a Buffett investment at a price he would never pay for the stock, though he wouldn't sell at that price with a 40% tax rate. Is USG a Buffett investment? Are junk bonds at 18% yields a Buffett investment? Were REITs at the bottom a Buffett investment? Somehow this most visible of investors is still one of the most misunderstood. He IS a value investor and always was. I love seeing him now buying what's cheap, very visibly, in large quantity and still the media hasn't gotten it that they were terribly wrong in everything they wrote about Buffett in the last five years.
Or maybe I'm just trying to say something provocative to get this thread stirring again. Happy New Year. |
