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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (53361)	3/25/1999 9:06:00 AM
From: epicure	Read Replies (2) \| Respond to of 132070

Someone breaks in to your house- do you want to hold a gun on them...or a stamp.

To: re3 who wrote (53361)	3/25/1999 9:16:00 AM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

Max99, >>Hi Michael...What do you think of Berkshire Hathaway, and b) do you think it can outperform the dow or s and p...? Would a buy on berk and a sell of an index be a thought ? << I know the question was directed to Mike, but I want to put in my 2 cents here. I own BRK since 1988. I think BRK will outperform the S&P500 from here for three reasons. 1. Even though a reasonable case can be made that BRK may be overpriced at 75,000 or so. It is much less overpriced than the S&P500 at 35x earnings. The portfolio of companies that BRK is made up of (in my view) is superior in many ways to the S&P, and the "look through" earnings PE is about the same as the S&P with the addition of General RE. BRK contains almost all high ROE businesses, with little debt, and great promise. Many are worth a premium to the S&P. 2. The insurance operations generate significant profitable float. As constructed, BRK is a sort of margin account except that the float generates profit instead of costing interest. These leads to superior returns. 3. Warren Buffett will allocate that capital and float as well as anyone on earth. The man is a genius and in a position to get deals that others may not. Wayne Crimi members.aol.com

To: re3 who wrote (53361)	3/25/1999 12:17:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Howard, heck, know. Those stamps sometimes go off in your hands and kill your wife accidentally after you get a better looking girlfriend. <g> I have lots of problems with Berkshire, the main one being Warren's age. Even if you like his investing style, he may not be doing it forever. I like his style for buying private insurance and furniture cos., but totally hate his public stock purchases. Admittedly, buy what went up yesterday and don't sell it has worked in the past, but I think it is a bogus theory. There were millions of people doing it in the 1970s and Warren is one of the few who got lucky. The others didn't. This doesn't mean he is not a good analyst. He is. But to make money in the stock market using his style is almost impossible and he has been the exception that proves the rule. Also, Berkshire is not really related to the S&P 500 or any other index. They are way overweighted in fluff consumer co.s and financials and have next to nothing in fluff drugs or techs. <g> It may do better, it may do worse, but it will not be a good hedge. My guess is that after their lousy year, they may outperform the market over the next 12 months, but that is the old reversion to the norm theory and is short term in orientation. If Warren's returns are returning to the norm longer term, look out below. <g>