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Non-Tech : Berkshire Hathaway Class B -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (902)	8/7/1999 7:30:00 AM
From: Benkea	Read Replies (1) \| Respond to of 1652

"Why do Berkshire holders have to hide behind this defense of being smug when the stock clearly hasn't performed in the past year or so? The numbers are clear." Actually, the only clear numbers are the earnings at BRK which are both real (unlike most option gaming techs) and substantial. As for performance, BRK is for people who interested in buying part of one of the best businesses on the planet. We know it to be so because it has the second largest net worth after Royal Dutch Shell. The last 12 months is one of the few time frames over the last 33 YEARS that one can negatively compare BRK to the S&P. In fact, it is more like the last 7 months, because BRK DOUBLED the S&P in 1998 gaining 52% vs. 26%. You sound more like a lottery ticket buyer than a fundamental analyser of business. That chart of the lotto ticket vs. RCA is less than encouraging. Here is another for you, it is the net chart (updated 8/2/99 before the last leg down to new lows) vs. the biotech craze: decisionpoint.com

To: Dale Baker who wrote (902)	8/7/1999 7:36:00 AM
From: Benkea	Read Replies (1) \| Respond to of 1652

And Dale: "someone who bought AOL on 1/1/98 still has a 500% paper profit." The Fools were up 25000% on AOL since their purchase in 8/94, but that is now comfortably under 9000% now. It will be interesting to see that number continue its' mind boggling decent. "A trader using a 10% trailing stop loss with AOL would have locked in closer to a 1000% profit." Your first mistake. You should have asked us if BRK was a good "trading" stock. We would have cleared that up for you. In fact, again Friday I added to my BRK position as I do anytime something I like gets much cheaper: berkshirehathaway.com How We Think About Market Fluctuations A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices. For shareholders of Berkshire who do not expect to sell, the choice is even clearer. To begin with, our owners are automatically saving even if they spend every dime they personally earn: Berkshire "saves" for them by retaining all earnings, thereafter using these savings to purchase businesses and securities. Clearly, the more cheaply we make these buys, the more profitable our owners' indirect savings program will be. Furthermore, through Berkshire you own major positions in companies that consistently repurchase their shares. The benefits that these programs supply us grow as prices fall: When stock prices are low, the funds that an investee spends on repurchases increase our ownership of that company by a greater amount than is the case when prices are higher. For example, the repurchases that Coca-Cola, The Washington Post and Wells Fargo made in past years at very low prices benefitted Berkshire far more than do today's repurchases, made at loftier prices. At the end of every year, about 97% of Berkshire's shares are held by the same investors who owned them at the start of the year. That makes them savers. They should therefore rejoice when markets decline and allow both us and our investees to deploy funds more advantageously. So smile when you read a headline that says "Investors lose as market falls." Edit it in your mind to "Disinvestors lose as market falls -- but investors gain." Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other. (As they say in golf matches: "Every putt makes someone happy.") We gained enormously from the low prices placed on many equities and businesses in the 1970s and 1980s. Markets that then were hostile to investment transients were friendly to those taking up permanent residence. In recent years, the actions we took in those decades have been validated, but we have found few new opportunities. In its role as a corporate "saver," Berkshire continually looks for ways to sensibly deploy capital, but it may be some time before we find opportunities that get us truly excited.