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Stocks B / Berkshire Hathaway


Subject:  Re: Mr. Market & The Floor Date:  12/12/2012  4:39 PM
Author:  rationalwalk Number:  196861 of 235716

Updated WSJ coverage:

Longtime shareholder Whitney Tilson of T2 Partners wrote to his investors in an email that the Wednesday's new authorization was "big news" because it "put a [new] floor on the stock." He said he purchased more shares "the moment I saw the news."

I can't argue with buying more shares at the current valuation but the reason behind the buying seems suspect to me for the reasons outlined earlier. Notably, it appears to have nothing to do with intrinsic value since Berkshire's IV is only modestly higher today than it was yesterday (due to the effect of the repurchase). His buy decision appears to be based on the perception of the increased floor alone. Otherwise, shares can and should have been purchased particularly after the inexplicable drop following the Q3 earnings announcement. Maybe Tilson was buying then as well.
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