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Investment Analysis Clubs / The BMW Method


Subject:  Re: BRK Date:  11/28/2012  4:54 PM
Author:  pauleckler Number:  40824 of 42233

Warren Buffett was on PBS' Charlie Rose just yesterday (and should be on Bloomberg TV this evening). He noted that Berkshire Hathaway has retained all its earnings. They have a massive cash hoard ($20B+) and he is looking for a major acquisition.

Most recently Berkshire bought into John Deere. Maybe there will be more of that. But last night he said that was one of his investment managers decisions, and not reviewed by him. He bought BNSF only a few years ago. He probably cannot do another railroad for antitrust reasons. He bought Lubrizol. More specialty chemical companies could work.

You have to worry about future leadership at BRK. He claims his replacement is in place and would be announced within hours if he were unable to serve, but you have to wonder if the transition at BRK will be as bumpy as the one at AAPL. AAPL languishes for now, but will probably respond nicely when earnings come out. Meanwhile profit takers drive down the price due to concerns about higher Capital Gains rates next year. BRK does not have that problem.

BRK is a long term accumulate stock for the patient value investor. Over time it continues to do quite well. AAPL is a short term opportunity as is FB (if people sell for tax loss purposes).
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