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

To: Maher Sid-Ahmed who wrote (913)	8/7/1999 8:20:00 PM
From: JuniorMint	Read Replies (1) \| Respond to of 1652

From this week's Barrons: Berkshire daunts many investors because of its high share price and dependence on the 68-year-old Buffett. These factors, however, shouldn't deter investors, argues Peter Russ, analyst at Fairholme Capital, a Short Hills, New Jersey, money manager. He says Berkshire could hit $100,000 a share in the next few years. The stock now trades for 1.7 times its book value of $38,000, considerably below American International Group, which changes hands at over 4 times book. Russ admits that Berkshire may be "stuck in neutral" for the time being, but he says it has always paid to buy Berkshire whenever its stock has dipped. Berkshire does face a couple of issues. The company's investment portfolio is having a rare down year because of declines in Coca-Cola, Gillette and Freddie Mac, three of its four largest holdings. Geico, Berkshire's auto-insurance unit, is sacrificing current profitability in a breakneck expansion effort. Geico had no operating earnings in the first quarter, compared with $61 million a year earlier. And Berkshire's purchase of the giant reinsurer General Re, widely regarded last year as a coup for Buffett, has proven rocky so far, even raising questions as to whether General Re's management hid problems from Buffett. General Re took a $275 million loss provision for a workers-compensation-insurance pool last year, and it booked an underwriting loss of $136 million in the first quarter. Moreover, General Re's big bond portfolio has suffered at the hands of rising interest rates this year.