Graham and Doddsville -- Value Investing In The New Era Message Board

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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: Freedom Fighter who wrote (714)	9/1/1998 7:59:00 PM
From: cfimx	Read Replies (3) of 1722

Buffet would have done this deal if his stock was at 50,000-provided he got at least as much intrinsic value as he gave up. It has little to do with what price Berkshire is trading at. brka trades as often and as close to its real value as any stock on the big board-although it happened to be well above intinsic value for a spell due to buffetmania. Buffet has been trading shares of brka for equity for a number of years now. But he much prefers to do cash deals and probably would have here but grn shareholders no doubt wanted brka shares. What could we say about his market view if this were instead a cash deal, done at the same moment? This was an extremely astute maneuver from WEB. He is effectively raising a ton of investable money without having to sell any of his overpriced holdings-stocks he wants to keep forever anyway. This transaction doesn't signal Berkshire's overvaluation. It does, however, tell me that Buffet believes there will be plenty of values created in the coming years. And he wants more investable cash on hand to take advantage of them.

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