Granitepost Posted February 20, 2009 Share Posted February 20, 2009 Although BRK.A is supposed to be worth 30 times BRK.B shares, for the last couple of days the Bs have been significantly cheaper than the As. For example, at the moment the As are 75,204 so you would expect the Bs to be 2,506 rather than the 2,340 for which they are trading. This seems to be about a 7% discount for the As. I can understand a difference existing for a short time period but wonder if this relationship has been common in the past or could be a function of the panic in the markets where the A holders may not be an anxious as the B holders. Any comments? Cheers, Jim Link to comment Share on other sites More sharing options...
el_chieh Posted February 20, 2009 Share Posted February 20, 2009 Yes, buy Bs and not As. If you have As and can do it tax efficiently, sell As to buy Bs. In 1999 AR Buffett said he'd go for Bs whenever discount >2%. Link to comment Share on other sites More sharing options...
nodnub Posted February 20, 2009 Share Posted February 20, 2009 The difference has typically been less than +/-3% The B's are leading the decline as they are much more liquid and B-share investors are more likely to be willing to sell at these prices (slightly more short term oriented than A shareholders) Link to comment Share on other sites More sharing options...
FlyingArrow Posted February 20, 2009 Share Posted February 20, 2009 The difference has typically been less than +/-3% The B's are leading the decline as they are much more liquid and B-share investors are more likely to be willing to sell at these prices (slightly more short term oriented than A shareholders) And I want to personally thank those willing B shareholders who sold me mine today ;) Link to comment Share on other sites More sharing options...
GOODYRL Posted February 20, 2009 Share Posted February 20, 2009 I converted some got 5% more shares in B plus some cash. Thanks Granitepost for bringing to my attention :) Link to comment Share on other sites More sharing options...
GOODYRL Posted February 20, 2009 Share Posted February 20, 2009 Shoulda coulda woulda (waited) the spread got even better at end of day. Link to comment Share on other sites More sharing options...
scorpioncapital Posted February 20, 2009 Share Posted February 20, 2009 The spread has been ongoing for over 10 years. I see no reason why it would ever close. For example, according to Google Finance, A's returned 6.94% over the last 10 years, while B's returned -.75% over this period - a spread of almost 8%. Link to comment Share on other sites More sharing options...
el_chieh Posted February 20, 2009 Share Posted February 20, 2009 The usual spread is ~1%. At various points the spread has been ~3%. Spread has never been this wide (~6%). The 10 year return basically reflects the discount. BRK As are v cheap. BRK Bs 6% cheaper. The gap should eventually return to ~1%. I've sold all my As and bought Bs. Link to comment Share on other sites More sharing options...
arbitragr Posted February 21, 2009 Share Posted February 21, 2009 Bought a bunch today at avg price of $2280. Seriously out of whack just after lunch, when fear of bank nationalization was high. Couldn't believe my eyes what was happening. http://i163.photobucket.com/albums/t314/ripleyx/Finance/brkavsbrkb.jpg Link to comment Share on other sites More sharing options...
GOODYRL Posted February 21, 2009 Share Posted February 21, 2009 So did i make a mistake? Link to comment Share on other sites More sharing options...
ubuy2wron Posted February 21, 2009 Share Posted February 21, 2009 I also purchased B's today however I am aware that WB has stated that he will be converting a shares to b shares every year for the next 2o years and the b shares may be sold for the foundations funding purposes. This will result in an increase in the A-B spread all things being equal, it will also result in an increase in voting control of the A shares, I have not thought this through however at some point in time control of BRK will come into play I suspect it will reside with Bill Gates who has spent the last 15 years learning about value investing from the master his masterpiece compunding money machine should remain intact for another 30 plus years. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now