Mike Stathis

7 Reasons Not to Buy Berkshire Hathaway

The fact that BRK pays no dividend is something that is a bit bothersome to me. I too addressed this point in a previous article as a reason why I would never buy the fund. Good of you to notice, since the masses rarely criticize him.

seekingalpha.com/artic...

But the fact is that all value investments MUST pay a dividend. One could argue that the reinvestment of the dividend has enabled BRK to achieve the growth similar to that seen in a growth stock/fund, but with less risk. My counter would be this...leave it to each investor to determine whether they want the dividends reinvested.

Another reason I would not be in favor of buying BRK (esp. during this bear market) is the fact that BRK has no ability to avoid market risk.

Also, you should note that Buffett invests in insurance companies mainly because they are cash cows. And having cash is essential to his asset management strategy, since, like mutual funds, BRK works primarily to lower the cost basis of positions during market declines, as opposed to minimizing market risk via liquidating positions. This is something I also discuss in the same article.

Fed Bailout of Wall Street: Not Fair to the Commercial Banks

Nice commentary and great industry insight.

A note: Bear Stearns was not bailed out. In fact, the Fed refused to bail them out but granted unlimited cash to IBs in the future. Bear got a bad deal.

Perhaps we should all be wondering how it was that JPM got such a sweet deal - virtually no risk of loss and the world's most highly coveted clearing and prime brokerage business units from Bear, which I would estimate to be worth in excess of $18 billion.

Either way, both the commercial and IBs come out of this mess with the support of taxpayer dollars, which is debasing the dollar further, causing further inflation and higher oil prices.

I think a better title for your article might be "Fed Bailout of Wall Street Not Fair to Taxpayers."

I regard U.S. banks as the enemy of the American people, both commercial and investment alike. America is now more preoccupied with making interest than making products and the full effects of this disasterous strategy has only begun to surface.

Having worked on Wall Street, I've seen the fraud and corruption. And I left the industry because I did not want to be anywhere near that type of "business."

As a consumer, I have been exploited, lied to, and even had money stolen from me by one very large commerical bank. In fact, as it stands today, the commercial banking industry now joins the ranks of the worst run industries in America, along with the auto and airlines.