Berkshire Hathaway hit below $100,000/share first Time and Close Above!
Berkshire Hathaway shares traded below $100,000 for the first time Ever in over two years today since October 2006, after the company revealed HUGE unrealized losses on derivative contracts tied to the stock market’s performance. The Share price Bounces Back From 7% Plunge To Avoid Closing Below $100,000. Though major stock indexes ended more than 6% higher, Berkshire stock closed down US$533, or 0.5%, at US$102,800.
The stock is down 31.1% from its all-time closing high of $149,200 on December 2007.
Berkshire estimated that shareholder equity fell more than US$8 billion in October, reflecting Very High Exposure to the derivative contracts and to other investments. It ended September with US$76 billion of stock and US$29.6 billion of fixed-income holdings.
Berkshire’s poor performances, and a weak earnings report for the third quarter, are prompting some talk that Warren Buffett has lost his Midas touch.
Look like the Greatest Value Investor stock is also NOT Immune to The Global Financial Tsunami!
Warren Buffett is perhaps one of the Greatest Value Investor of all time. His company, Berkshire Hathaway, has grown from over $8 a share when he started acquiring its stock back in the 1960’s to over US$102,800 today, ballooning Buffett’s personal holdings to over more than $36 Billion.
Berkshire’s Class A shares sold for US$102,800 as of today, making them the highest-priced shares on the New York Stock Exchange, in part because they NEVER had a stock split. Shares closed above $100,000 for the first time 23th October 2006. Berkshire Class B shares have 1/30th of the economic rights of the Class A shares, and therefore trade roughly at 1/30th of the price of the Class A shares.
Berkshire’s CEO, Warren Buffett, is a very well respected for his investment insights, prowess and his very deep understanding of a wide spectrum of businesses and investment.
His annual chairman letters are read and quoted widely around the world. Barron’s Magazine named Berkshire the most respected company in the world in 2007 based on a survey of American money managers.
Omaha-based Berkshire owns more than 73 companies, and is best known for its insurance holdings such as auto insurer Geico Corp and Reinsurer General Re Corp.
I foresee Huge Market Volatility in the coming weeks till Middle of the Next Year at Least.
BE careful DO NOT Caught Up In The Biggest Financial Mess Of The 21st Century and KEEP CASH!
All Feedback & Comments are WELCOME below!
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Latest Update: It CLOSED below $100,000 and never REBOUND! (Monday, November 17, 2008)
Today’s closed at $95,615 is a NEW Two-Year Closing Low. The stock fell $5,385 today, a Sudden Drop of 5.3 percent. That’ll be the Biggest One-Day Point and Percentage(%) Decline in Three weeks, and the Fourth Biggest Percentage DROP of the Year.
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hi Abdul Rahman,
All depend on your market view. If you say holding for long period say 3-5 years period, YES Now is a Great Buy…Remember things may get cheaper & cheaper. Anyway, NO one got the crystal ball. That why the financial market is very Exciting & Interesting!
Hi, just wondering what your message is for this posting then? To keep cash and not buy?
Wont it be too late to buy if the price rises once the economy recovers?
hi Joe,
It all depend your your market view. For me short term is NO NO but long term is OK…accumulate slowly. Say U got rm200K capital, use maybe 20% now.. then slowly accumulate rather than put rm200k now. My remisier told me to look at strong counter like Public Bank
Warren Buffett, the Sage of Omaha, lost $16.5 billion. Shares of Berkshire Hathaway Inc. (NYSE: BRK.A) are down about 32% since the beginning of the year.
Billionaire Warren Buffett’s annual letter to be released Sat
OMAHA, Nebraska: Billionaire Warren Buffett will likely use a few lines in his annual letter to Berkshire Hathaway shareholders to welcome new investors the company acquired along with BNSF railroad.
But he’ll also have a busy year at the company’s 80-odd subsidiaries to explain when the letter is released this weekend.
The shareholder letter Buffett writes remains one of the best-read and most-quoted business documents every year because so many people follow Buffett, the so-called Oracle of Omaha.
But analyst Justin Fuller, who writes about Berkshire online at buffettologist.com, says the letter may be losing some of its impact because Buffett grants more interviews than he used to do.
In years past, Buffett avoided interviews and public comments so the annual letters and Berkshire’s shareholder meetings were about the only times investors could count on hearing from Buffett.
Not anymore.
“You get a lot more access to Buffett’s view of the world through his various interviews,” said Fuller, who works with Midway Capital Research & Management in Chicago.
For example, two days after releasing his annual letter, Buffett plans to spend three hours answering questions on a cable business news network.
And Buffett just did a round of interviews Monday about the lunch he auctions off for charity each year.
But analysts and many investors will still be eager to read Buffett’s explanation of how Berkshire’s businesses fared in 2009.
Investors also want to know more about what led to Berkshire’s roughly $26.7 billion acquisition of Burlington Northern Santa Fe railroad, and whether Buffett will offer any new clues about his successor.
Buffett’s letter and Berkshire’s 2009 annual report will be posted online at berkshirehathaway.com on Saturday morning.
Many of the companies Berkshire owns have been hard hit in the recession, and units like Acme Brick, Shaw Carpet and NetJets aren’t likely to improve significantly until the economy does.
But even if Berkshire’s retail operating businesses continued to struggle, its insurance and utility businesses will still contribute strong numbers.
The insurance unit alone, which includes Geico and reinsurance giant General Re, regularly accounts for more than one-third of Berkshire’s net income.
And Berkshire’s portfolio of derivatives contracts, some of which are tied to credit defaults and some of which are tied to equity markets will likely provide a big boost to Berkshire’s reported earnings.
Berkshire’s derivatives contracts are all long-term bets that won’t mature for years, so it won’t be clear whether those deals are profitable until much later.
But Berkshire is required to estimate their value each quarter, and that estimate is almost certain to be a positive force in the fourth quarter because the stock markets improved significantly last year.
For instance, in last year’s third quarter Berkshire recorded an unrealized $1.1 billion gain on its derivatives.
Andy Kilpatrick, the stockbroker-author of “Of Permanent Value, the Story of Warren Buffett,” predicted that Berkshire results will impress.
“I think it’s going to be good enough that some people are going to say, ‘Whoa,”‘ Kilpatrick said.
The three analysts surveyed by Thomson Reuters expect Berkshire to report fourth-quarter earnings per share of $1,208.33 on average.
Those analysts also expect full year earnings per share of $4,712.47.
Buffett’s preferred performance measure involves comparing Berkshire’s book value – assets minus liabilities – against the performance of the S&P 500 index, which Berkshire recently joined.
Berkshire’s book value declined in 2008 for only the second time under Buffett when it slid 9.6 percent to $70,350 per share.
The Standard & Poor’s 500 index may provide a tough comparison in 2009 because it gained 23.5 percent for its best showing since 2003.
The three analysts surveyed by Thomson Reuters estimated that Berkshire’s book value per share at the end of 2009 would be $83,391.44.
Worrying about who will take over for the 79-year-old Buffett is a common pastime for Berkshire investors.
Buffett has previously laid out the basics of the company’s succession plan, but won’t discuss details.
Last year, speculation swirled around Berkshire executive David Sokol after Buffett picked Sokol to lead NetJets.
Sokol was already the current chairman of Berkshire’s Des Moines, Iowa-based utility company MidAmerican Energy Holdings Co.
To replace Buffett, Berkshire plans to split his job into three parts – chief executive officer, chief investment officer and chairman.
Buffett, however, has indicated that he has no plans to retire, and he says he loves his work and remains in good health.
Morningstar analyst Bill Bergman said he thinks Berkshire’s core principles and operating practices may be more well ingrained than most people realize.
And Berkshire’s operating subsidiaries are allowed to mostly run themselves except that Berkshire decides centrally how to invest capital.
“I think the succession risk has been overplayed,” Bergman said.
Berkshire owns roughly 80 subsidiaries, including clothing, furniture, jewelry and corporate jet firms, but its insurance and utility businesses typically account for more than half of the company’s revenue.
It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/24/business/20100224122201&sec=business
Billionaire Warren Buffett trims holdings in several firms
OMAHA, Nebraska: Billionaire Warren Buffett’s firm says it cut its holdings in a dozen different companies in the first quarter, including Kraft Foods and Procter & Gamble, as it finished raising cash for its US$26.7 billion acquisition of the Burlington Northern Santa Fe railroad.
Berkshire Hathaway detailed the changes to its roughly $51 billion U.S. stock portfolio in documents filed with the Securities and Exchange Commission on Monday.
The filing offers a snapshot of the Omaha-based company’s holdings as of March 31.
During the first three months of the year Berkshire also reduced its stakes in ConocoPhillips, Costco Wholesale, Gannett and Johnson & Johnson.
But Berkshire did buy some shares of Republic Services, Iron Mountain, and Becton Dickinson. –
fr:biz.thestar.com.my/news/story.asp?file=/2010/5/18/business/20100518074709&sec=business