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: porcupine --''''> who wrote (1060)	12/21/1998 6:51:00 PM
From: Freedom Fighter	Read Replies (1) of 1722

Berkshire Hathaway a Value Now? In the last week or so Berkshire Hathaway stock has come under enormous selling pressure as a result of the imminent merger with General Re. General Re was part of the S&P500. The new merged BRK will not be at this time. This has forced holders of General Re that are part of/or are trying to mimic the S&P500 to sell their shares of GRN and buy the new addition to the index instead. Due to the fixed relationship between BRK and GRN stock, they have sunk together. My preliminary analysis of the merged company suggests that the combined entity is now selling at a "Look Thru" PE ratio that is very much in line with BRK's average level over the last few years. It is selling at a discount to the S&P500 despite a far greater growth rate and many companies with lower risks that make up the portfolio. I believe the addition of GRN to the BRK family adds significant long term potential and value to BRK due to size, new opportunities, cost savings and other synergies. It also positions BRK to take advantage of a bear market. GRN has an enormous bond/bill portfolio and Warren is now sitting on a war chest of around of 30 billion. There is little doubt that as opportunities present themselves, WB will reallocate this portfolio in higher return securities and increase look thru earnings and value. One might say that WB is probably praying for a bear market right about now! I believe it is not a screaming buy at this price. But in this environment it is worth purchasing as a long term core holding. I have owned the company since 1988. I added to that position today. Wayne Crimi Value Investor Workshop members.aol.com

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