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Stocks B / Berkshire Hathaway


Subject:  Re: Buffett/Jayhawk Q&A Date:  7/21/2005  9:07 PM
Author:  CMBSPro Number:  106654 of 254416

I was one of the KU students who made the trek to Omaha. While addressing the 50% return question, Mr. Buffett launched into a lecture about when he was young.... and he would pour through Moodys Utility Company ratings looking for the obvious mis-priced companies with price/book ratio's under 1...and he said anyone willing to do the work will find these opportunities....and he said he would drive to small towns looking for blocks of these shares.... Mr. Buffett is a special man, one in a million, or $40something billion to be exact.

I'm not sure he would buy BRK today - it has been one of my worst performers the last two years. I try to make up the yield difference by taking a shareholder discount at Borsheims and Nebraska Furniture Mart during the shareholder weekend.

One issue Mr. Buffett pointed out about the burden of capital is that to buy meaningful chunks becomes a disclosure problem - once he discloses his ownership, the price is no longer dear. This is particularly a problem in some foreign markets where the reporting threshold is lower.

It will be interesting to see how BRK does. For me, 4 B shares is the most I will allocate of my small portfolio. Mr. Buffett has already warned - expect lower returns. As the BRK gatekeeper, he knows best. But the long-term shareholders can't complain. I'm looking for 50% returns - and I may have found one in NBIX - a real sleeper thats returned 40% in a few months.
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