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WSJ: America Lines Up for Piece of Buffett


Guest kumar
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http://online.wsj.com/article/SB10001424052748703382904575059633167905988.html?mod=WSJ_newsreel_business

 

....scramble for Berkshire shares by index funds that, by one estimate, will reach $14 billion of buying....Conventional wisdom holds that the flood of purchase orders from fund managers with portfolios tied to the S&P 500 will drive up the price of Berkshire shares as the markets close Friday. Both the A and B shares would appear to be proving the theory correct: They are up more than 10% since the stock split....

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http://online.wsj.com/article/SB10001424052748703382904575059633167905988.html?mod=WSJ_newsreel_business

 

....scramble for Berkshire shares by index funds that, by one estimate, will reach $14 billion of buying....Conventional wisdom holds that the flood of purchase orders from fund managers with portfolios tied to the S&P 500 will drive up the price of Berkshire shares as the markets close Friday. Both the A and B shares would appear to be proving the theory correct: They are up more than 10% since the stock split....

 

 

Yes, but these additions to the S&P500 generally peak on the effective date which is next Tuesday rather than the last trading day before which is Friday.  The average gain these two days relative to the S&P500 (the day before and the effective date) is about 2 1/2%, but BRK has been besting the average outperformance for a new S&P500 admission so far by a factor of three.  Therefore, there may still be considerable upside from the buying pressure of this "long squeeze".  :)

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