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Stocks B / Berkshire Hathaway


Subject:  Re: Buffett premium Date:  2/25/2013  3:16 PM
Author:  rationalwalk Number:  199071 of 236300

I think if Buffett disappears, the market will express very clearly that that premium was positive, with a sharp drop in market prices. If they drop more than about 10%, I will probably buy more shares; in the longer term, prices are likely to rebound nicely as the market realizes how valuable Berkshire's assets are.

The market's reaction to Warren Buffett's retirement or death is unknowable until that even occurs and will depend on the timing and circumstances surrounding this event which is also unknowable. Yes, AT THE TIME of the event, we will know precisely the value the market places on Buffett's presence by the difference in Berkshire's market capitalization from the time before the news is known until immediately after the news breaks. However, we cannot know what this reaction will be in advance. At least I don't know how to predict it.

This is getting confusing. In one post, you have said that the market premium is unknowable, that it is negative (a Buffett discount), and that it is positive but transitory. I only agree with the latter.

It gets confusing when one attempts to place precision on something that cannot be calculated or known. I have NO IDEA what the market is thinking and made it clear in my posts that I was MERELY SPECULATING on all of that.

This is a pointless discussion in any case and it is confusing to me as well because even if we could "figure it out", which we can't, it adds zero value to our understanding of Berkshire and provides zero opportunity to benefit based on this "knowledge" through the stock market.
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