TonyCinTX

Buying Berkshire: The Ultimate No-Brainer

I am long BRK-B, and unconcerned by the downturn. Buffett is doing now exactly what I would do if I had hundreds of millions to play with; he is buying brokerages for 20 cents on the dollar because their only option is to go bankrupt and lose everything.

Buffett (his R.E. manager Peltier, actually) has bought $200 million worth of quality brokerages. So what if earnings are down 7% for a quarter, or a year? They can drop 25% and the stock can drop by 50% and I will remain unconcerned as long as Berkshire's strategy remains sound.

I am unconcerned because recessions kill everybody's profits, and what separates the winners from the losers in 2012 is whether, in 2008, they were being forced by the recession into selling their hard-earned hard assets at 20 cents on the dollar, or buying somebody else's hard-earned hard assets AT 20 cents on the dollar. Guess which side I am on.

Buffett said from the beginning the sub-prime market was B.S. and would come to tears. Well, those tears turn out to be an opportunity, there is real value to be found in the debris of the sub-prime hurricane. It might not become apparent for years, until real estate skies are clear and sunny again, but I am glad Berkshire has all the cash, expertise, and corporate wherewithal to be first in line to cherry pick the bargains.