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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (28247)	9/25/2007 3:43:20 PM
From: Jurgis Bekepuris	Respond to of 78753

I think that BRK would drop if Buffett died. I am not sure how much and whether it would be a screaming buy at that time. I don't want to guess either. :) I'll cross that bridge when it comes to me. ;) BRK and WSC poor ROA/ROE is well known. There are couple explanations: high cash position and rather complex balance and income sheets (for BRK only), invisibility of "owners earnings" of investments and so on. You cannot judge these companies by mechanical ROA/ROE without looking deeper. Unfortunately, only very few people look deeper. Most invest on belief - or do not invest after looking at superficial measures. I can't claim that I understand these companies fully, although I have looked at them more than superficially. I agree that a cash pile is somewhat an issue. Even more so for WSC which, if it was independent of BRK, could probably find a lot of places to earn high returns. BRK can be somewhat justified for holding all the cash to earn AAA reputation and supercap reinsurance deals. Regarding other stocks, I also invest in companies that I sell in 1-3 years (or even months if they runup fast). I just don't compare them to BRK/WSC. IMHO, only "ageless" companies like KO, PEP, maybe GE, JNJ, maybe C, AXP can be directly compared to BRK/WSC. :) As I said, I practically do not invest in companies that have less than 5 years positive earnings and less than 15% ROE, so I cannot comment on LRCX or VRGY valuations or attractiveness. :) (Although I had invested in SemiEquips in 90's, so I know the sector and I still believe they are more cyclical than growth ;)).