A Long Squeeze in BRK?

[twacowfca]

So, to resurrect this thread, the baby-Bs have hit $79 this afternoon.  Where have people situated their limit-orders?

 

As I suggested earlier, I kinda figure IV might be somewhere around $100, but BRK trading at IV is about as common as seeing Halley's comet.  Is $85 too low for a limit-order?

 

SJ

 

 

FYI  Stocks added to the S&P500 that had never been

in another S&P index tend to rise another 15- 20% relative to the index in the months after joining.  BRK's price action after admission has exceeded the average for the other rare birds that had never been in an S&P aviary.  Stocks in this small subset of new admissions tend to drop more than 3% relative to the index in the days after the effective date; in contrast, BRK has kept pace with the index.  This augurs well for the thesis that S&P500 admission is a slowly developing catalyst, finally releasing BRK to rise at least to parity with the  relative valuation of the average S&P500 company.

[rmitz]

I would kick my own ass for selling below 100$. The operational side is going to kick ass over the next decade and more.

(Secretly I would situate IV closer to 160k-170k an A share at least.)  ::)

 

I feel that $100 is a reasonable valuation.  An optimistic one (which is probably not unreasonable) could easily be at $120.  If I had the option today, I'd probably sell just above $100 though, except for my core position.

[Guest ValueCarl]

Does not anyone here see the FAT Berkshire dividend coming down PIKE except for me?

 

It's coming buried inside of a BURLINGTON FREIGHT TRAIN....CHOO,CHOO, ALL ABOARD!!!!!!!!!!!!!!!!!!! LOL, imo

[shalab]

Unless BRK does another big acquisition ( like Krafts or Mars ), it is likely there will be dividend in another five years.

[Dynamic]

Personally, I don't think a BRK dividend is likely in the next 5 years. Nor do I want one. In my circumstances and tax-exempt account, capital sales would be no worse (apart from dealing costs) as a means of withdrawing cash from BRKb, especially now it's in smaller chunks, not that I envisage sales except when very attractive opportunities arise elsewhere.

 

The opportunities to permanently deploy capital will always be concentrated in periods of market distress and shortage of capital.  I think a series of significant but smaller acquisitions is likely.

 

Larger acquisitions of BN&SF (BNI) size are likely in the future, but will necessarily occur very sporadically. Obvious and recognisable brands (especially those that are publicly traded) might be tough to acquire at an attractive price (as whole companies) except in unusually adverse circumstances, perhaps at fairly high multiples of temporarily depressed earnings (thus offering an apparently high bid P/E) which Berkshire's CIO will recognise as attractive on the basis of more typical future earnings averaged over the following decade or so (and likewise a sound senior management team at risk may be glad to support an acquirer oriented to long-term performance, not quarterly earnings growth)

 

The profile of Berkshire Hathaway and Warren Buffett internationally has been raised enormously in the general business press since the global economic crisis, which ought to significantly expand the universe of potential sellers aware of the possibility of selling their private businesses (such as Iscar) and becoming part of the Berkshire family. I'd imagine we could see 2 or 3 such acquisitions by 2015, perhaps including smaller traded entities akin to Clayton Homes.