Jan 27, 2010

Buying a Piece of Warren Buffett- A Very Tiny Morsel

warrenbuffett After their 1 to 50 split, Warren Buffett’s Berkshire Hathaway second class B shares can be obtained by mere mortals like you and me. Unless you have always been a rich fellow that is.

I saw the news about the split a few months earlier but forgot about it till today when I took my wife’s iPhone and looked at her Bloomberg Aps. Well, the inclusion of it to S&P 500 was the big news there and I had missed buying it during the correction of the past few days.

So I will blow my entire bonus and more on this stock and get a piece of the legendary investor Warren Buffett at a higher price than it would have been if I had been a little more awake.

Have you got a little piece of that stock?

How small a piece? Each B share will have one-ten-thousandth (1/10,000th) the voting power of an A share. But look on the bright side. The B shares were selling for around $3,450 a share before the split. So it should sell for around $69 but it is going higher right now.

Here is a letter from Warren Buffett comparing between an A share and a B share. A blogger has also compared getting a B share to getting some mutual funds and compared the relatively cheaper option of Berkshire Hathaway B share.

For the first time in a very long while, I am getting a stock without any other analysis whatsoever.

This is a guy whose 2006 annual salary was about $100,000 according to Wikipedia’s article on Buffett. And how much are the fat cats of Wall Street paying themselves or for that matter, our dear leaders?

The market opens in another 25 minutes and I am in the queue as I am writing this. Wish me luck.

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4 comments:

  1. la papillionJanuary 28, 2010 at 12:24 PM

    Dunno if you've got this already. But in my opinion, there are better things to buy. I have it too when I was bitten by the 'value' bug, but had since divested 2 shares, leaving only 1 (currently underwater).

    I don't like it because it's a stalwart...and they don't give dividends.

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  2. MusicwhizJanuary 30, 2010 at 1:12 AM

    Hi Lemizeraq,

    I stick to my philosophy that I should always understand the business, financials and Management before I purchase any company; that includes BRK as well, even though I know who's running it (WB of course).

    So I will take a pass until I can suitably size up the company. In the meantime, I am sticking to Singapore-listed companies. :)

    Regards,
    Musicwhiz

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  3. LemizeraqFebruary 1, 2010 at 10:38 PM

    Hi la papillion,

    Yeah my order got through. I will just keep it. Think that even when Mr Buffett passes along, the stable of companies that were bought have great prospects.

    And yes, I know about them not paying dividends.

    Your 1 should have become 50 shares now.

    Lemizeraq

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  4. LemizeraqFebruary 1, 2010 at 10:42 PM

    Hi Musicwhiz,

    Thanks again for visiting.

    Yeah, I got excited that it is split up and thought should get it quick before their inclusion into S&P 500 is fully factored into the prices.

    The stable of companies that is owned by Berkshire Hathaway is attractive.

    I am reading a book about 101 reasons to own Berkshire Hathaway shares and I will be checking to see if the valuation deserves subsequent investment further down the road.

    Your investment returns in dividends is pretty high in percentage terms and value, so you should keep doing what you have been following.

    I just hope that at the end of 2010, I didn't have a post to state reasons why I should never buy a stock on impulse again.

    Lemizeraq

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