Yesterday the baby Berkshires (BRK.B) split 50 to 1. And it was up 4%! This was to be expected. The stock is now affordable to many small investors and there is talk about it being added to the S&P500 index.
When the stock split was first announced, I had a brilliant idea to sell my baby Berks on the news and then re-buy them just before the split. I figured that the euphoria of the split news would push the stock higher and then the enthusiasm would die down and I could buy them back lower. So the stocks that I bought at $2,550 (split adjusted price of $51) were sold at $3,500 (split adjusted stock price of $70).
My plan worked. The stock drifted down to $3,250. I would’ve been happy to buy them at $3,300. Especially since the current price is $72.25 or just over $3,600 pre-split price. Unfortunately, with my busy school schedule, I totally forgot to put in a buy order and ended up buying the stock back at $71.
Sometimes it's better to not try and optimize everything! How many of you are buying BRK-B now that it’s more affordable?