What's Wrong with Wesco?

Wesco Financial (WSC) is down $58 or 17%. This is the insurance company run by Charlie Munger, who sits next to Warren Buffett at every annual meeting of Berkshire (BRK.A). Does the market really feel that Wesco is going to take a loss because it owns CDOs or some other toxic paper?

Comments

[JasonC650:]

Same question from me. Munger is clearly one of the smartest investors of all time. I don't understand why Wesco would get disproportionately hammered.

2008 Oct 10 04:18 PM

[Rocky17:]

Wesco and Berkshire have exactly zero "wrong" with them. Hedge funds, mutual funds, and pension funds have huge numbers of redemptions when there is this much fear in the market as indicated by the all time high VIX. They have to throw out the stock market "babies" along with the bath water and have to sell even their best stocks to redeem enough money to cover the requests. Since they are low volume stocks, any disproportionate number of sell orders will drive down the stock price to low levels. Whenever it turns around, it will return quickly to more proportionate levels. Wesco has a book value of 331/share. It is the time to BUY and I have been. Be fearful when others are greedy, and greedy when others are fearful. Warren buffet is at his best in times like this, when he by one dollar bills for 30 or 40 cents. warren also says that the stock market is a voting machine in the short run, but a weighing machine in the long run.


On Oct 10 04:18 PM JasonC650 wrote:

> Same question from me. Munger is clearly one of the smartest investors
> of all time. I don't understand why Wesco would get disproportionately
> hammered.

2008 Oct 11 01:29 PM