There is always a positive when the market is moving with such volatility as is currently the case. One of the main factors is being able to buy fabulous companies at a fair price. In this case, it looks like the market has two fantastic, heavily-insider owned companies matching that criteria:
1. Berkshire Hathaway (NYSE:BRK.A) is run by world-renowned investor, Warren Buffett, and his fabulous colleague Charlie Munger. You'd be hard-pressed to find a better tag-team and even more so one selling at such a cheap price. Trading at just above 1x price/book and under 14x price/earnings, Berkshire looks historically cheap. Add in the fact that with its earnings yield over 7% and the 10-year treasury sitting right near 2%, this might very well be the cheapest it has ever been on a comparative basis to investment-grade fixed-income investments.
Famously, this stock doesn't have a dividend, but Buffett, who himself is the largest shareholder, owning about 33% of the company, makes a valid point. He states the fact simply that people who invest in Berkshire want him to manage their money and so the dividend taxes that would have to be paid would essentially just destroy value for the vast majority of people re-investing the payout.
Now, even though some of his largest equity holdings, including American Express (NYSE:AXP), Wells Fargo (NYSE:WFC), U.S. Bancorp (NYSE:USB), and Procter & Gamble (NYSE:PG) have taken a hit this past quarter and will depress book value in the short term, I still give this high quality and well-diversified company a buy here at $107,000 or the B-Shares worth 1/1500th at $71.
2. Leucadia National (NYSE:LUK) has essentially been an investment fund since the brilliant investment minds and largest shareholders Ian Cumming and Joseph Steinberg took the helm in 1979. Since that time, what they've done has been nothing short of outstanding, compounding book value by almost 20% annually for the time ending December 31, 2010 and raising the share price from a split-adjusted $.07 in 1979 to its year ending 2010 share price of $29.17, a 21.5% CAGR (compounded annual growth rate).
That is an absolutely stunning 8.2% better annual return than the S&P 500 during those 31 years, which is among the top 1% of all investment managers globally. At first glance, the valuation metrics look compelling as it trades right near 1x price/book and a tiny 3x price/earnings. However, most of those earnings came from a massive one-time $1.15 billion tax benefit in the fourth quarter of 2010, so that makes the P/E an inappropriate valuation measure in this case.
Either way, Leucadia has a high quality, heavily insider owned management team trading very unusually at book value. I think this very well-managed, very well insider-owned firm is a buy here at $27.50/share as well.