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Strategies & Market Trends : Buffettology

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To: Michael Burry who wrote (194)	6/19/1998 9:44:00 PM
From: James Clarke	Read Replies (3) of 4691

Buffett Announces BRK is Overvalued Hey guys, did you read between the lines of the acquisition announcement today? The biggest acquisition Buffett has ever done. This position is now significantly bigger than Coke, and correct me if I'm wrong, probably bigger than GEICO. Buffett passed on General RE last year when it was trading much lower, and now he buys it at double that price. Why? Because he's paying in stock. If you read Buffett, you understand the difference between paying in stock and paying in cash. If you believe your stock is overvalued, you can buy a fairly valued business at a discount. I think that's what happened today. To state it a bit more strongly, Buffett just went short $22 billion worth of Berkshire Hathaway. That's not how other companies would look at a stock transaction, but that's how he has written about it in the past. We may have just seen the top of the market.

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