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Berkshire (BRK.A, BRK.B) decides on an eventual successor for 81-year old Warren Buffett, but...
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Sunday, February 26, 2012, 8:18 AM ETBerkshire (BRK.A, BRK.B) decides on an eventual successor for 81-year old Warren Buffett, but refuses to disclose his or her identity. Buffett, who has no plans to step down, expects a "seamless" transition. It remains to be seen whether an anonymous heir apparent will suffice to appease shareholders' concerns about a post-Buffett Berkshire.
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Then he can turn the company over to his secretary, who already pays her fair share like we do.
You could have bought BRK.A at $94,500 on Feb. 27, 2004, and by now, after 8 years, at $120,000 that's an annually compounded rate of 3.01%. This includes all dividends of zero per share per year.
You could have bought BRK.A at $73,195 on Mar 6, 2009, and by now, after 3 years, at $120,000, the same annually compounded rate was, uhm, about 17.94%. So, only if you were smart enough to buy at this recent low would you get a return that a self-respecting "Buffeteer" is looking for.
Or you could have bought BRK.A at $148,220 on Dec. 7 2007, and by now, at $120,000, you'd still be 19% in the hole.
Luck of the draw, eh? Looks like the market will fluctuate.
For several years though it felt like Buffett was "running as fast as he could" (meaning he bought one great company after another), just to "stay in the same place". Well, more or less. It's an Alice in Wonderland reference. Yeah, apples, oranges.
Makes you wonder though whether the whole "Berkmobile" will be worth more when it's pulled apart and sold off piecemeal, (I know diehard Berkshire investors shudder at the thought), but, well, with an earnings yield of 5.85% (7023/120000), there must be several components of BRK that do better than that.
And then you look at the demographic side of babyboomers retiring, i.e. more and more people looking for dependable income, so that just has to exert a certain (or uncertain) downward pressure on the stock. On the other hand, without the darn ongoing recession, people just would buy more coca-cola, candy, carpet, shoes, furniture, buy newer cars (more Geico premiums), and so forth. So sometimes you just have to be happy to be were you are, instead of someplace worse.
Off on all tangents, all the time, that's just me.