Throw This Stock Away

• Report this Comment On September 27, 2011, at 12:37 PM, KJHValue wrote:

  It's hard to know what opportunities Buffet is looking at. At the worst he is buying undervalued shares and leaving the option to make more acquisitions (if he doesn't already have one in mind).

  Buffet will still have plenty of cash to do all the things you described above.

  I like PG, KO and love WMT at current price.

  Bought BRK-B at $68 and $70

• Report this Comment On September 27, 2011, at 12:43 PM, mwlove wrote:

  In August I sold two Fool darlings, Dolby and Berkshire. I put the money in other SA picks: Apple, Nuance and PNRA. Nuance is up 30% since then, PNRA about 20%, Apple close to 30%. Even with the bounce from the announcement of a possible buyback (which may not actually happen), BRK is just above where I sold it. Dolby is about even with where I got out. Berkshire may do well from here, but I don't think it will do as well as other possibilities. Buffett is a great investor, but the days of market-crushing returns are done, I suspect. If you're buying now, it may be a good investment, but don't expect spectacular.

• Report this Comment On September 27, 2011, at 12:45 PM, Thumper68 wrote:

  If Buffett buys back and retires stock his book value will rise per share due to the lower denominator. He may not get it back to even but given the up and down of the market it may get a lot closer than it is now.

• Report this Comment On September 27, 2011, at 1:07 PM, DavidAnglin wrote:

  Its intangible value has been used by me and my wife two or three times. We were exposed maybe 20% of our margin account when 9/11 happened then our exposure became around 50%. When I called financial company later in the year, I was worried about margin call, I was told-"fagetta-boud-it".

  We bought about 20 years ago and while it has become the dominant stock in our portfolio it has caused us to evaluate stocks better-and to make purchases of some of those stocks. These have done well. As Charlie says-"What's wrong with getting rich slowly?"

  Its size is an obstacle to rapid growth, however, there is a lot to be said for stability.

• Report this Comment On September 27, 2011, at 1:28 PM, DoctorLewis4 wrote:

  Okay Rick. You buy Walmart. I'll hold on to my Berk-B. Let's see who is ahead in five years.

• Report this Comment On September 27, 2011, at 1:34 PM, TMFBreakerRick wrote:

  Thumper, not necessarily. Keep in mind that the cash that he's using for the buyback IS part of the book value. It is part of the math behind shareholder equity. If he's paying a premium to book value it will lower the numerator more aggressively than the denominator.

• Report this Comment On September 27, 2011, at 2:48 PM, buffalonate wrote:

  I highly doubt he will buy back shares. He is just artificially pumping up the value of the stock to make shareholders happy.

• Report this Comment On September 27, 2011, at 5:50 PM, MegaShort wrote:

  "Then again, many of its holdings have fared even worse. Why not just double down on them?"

  Buying back BRK stock IS doubling down on current holdings - publicly traded and full subsidiaries.

  Intrinsic value is far above book value (ask Morgan Housel to explain if you don't understand why), therefore a buyback will increase intrinsic value per share.

• Report this Comment On September 27, 2011, at 6:00 PM, MegaShort wrote:

  http://www.fool.com/investing/general/2011/06/13/berkshire-h...

  Buffett: "Our book value far understates Berkshire's intrinsic value, a point true because many of the businesses we control are worth much more than their carrying value." Some Berkshire assets, Buffett has claimed, are "worth fifteen to twenty times the value at which they are carried on our books."

• Report this Comment On September 27, 2011, at 6:24 PM, traderpat9 wrote:

  brk-a & b are just too expensive for the average joe to buy. some of the fools are trying to go with some lower priced stocks hoping for greater returns in 3 to 5 years. my portfolio since i joined the fools in dec of 08 is looking worse than it did 3 years ago & i bought 30 stocks based on the fools advice. my orginal investments like mcd, abt, & hog are actually the only stocks keeping my portfolio looking good. will be revising my portfolio in the last qrt of 2011 & brk-a & b, & wally world will not even be a consideration.

• Report this Comment On September 27, 2011, at 10:20 PM, pauldelang wrote:

  So what is Buffett telling us? His whole life he has been investing in undervalued situations with great long term growth potential.And why should it exclude his own company? He is telling you and me that he has spotted a great undervalued situation and he intends buying in. At least $20bil. Ignore this investment opportunity at your own risk of losing out. See the value through the negative sentiment. A great insider has given you a lifetime tip.

• Report this Comment On September 29, 2011, at 7:19 PM, kmacattack wrote:

  Rick I have to disagree with you. I bought Wal Mart about 10 years ago (again) after owning it and selling it in about 1990. Just before the crash of 87 I bought 500 shares of Wal Mart to give me a total of 800 at a cost of about $36 per share. When the market crashed in 87, WMT dropped to $21 per share and it took more than 2 years to recover to the point that I could break even. WMT split a couple of times within a few years, so I screwed up by selling when I did, but I was not happy with the performance from 87 to 89, when other stocks far outpaced Wal Mart, plus I was beginning to hate the company as I watched Wal Mart destroy small towns all across my sales territory, which was half of Oklahoma, one of the early "footholds" of the NW Arkansas based company. When I bought WMT 10 years ago, I paid $56 for the stock, and other than a brief rally years later up to about $64, the stock was generally below my purchase price, dropping as low as $48. I loaned this company $56,000 for a 10 year period and got out when I could break even (actually I lost probably 30 percent versus inflation). When I sold the stock, I bought 700 shares of BRK-B with the proceeds, and although I am about even on my purchase (bought in right after the 50 to 1 split), I think Berkshire will far outperform Wal Mart. I buy a few groceries at Wal Mart, because they have the closest store to my home, but I'm spending only about 1/4 of the amount I did years ago. Their prices are not cheap, and many of the items they sell are absolute JUNK. I have a $300 made in China grill that is 3 years old, and is literally about to collapse from the rust. My old grill was made in the USA and lasted 25 years with almost no rust. The new model is "stainless steel commercial rated" model. The entire interior is literally almost completely rusted out, and the "stainless steel" lid began rusting wihtin a couple of months. I would gladly have paid an extra $100 for a comparable featured American made product. The last two gallons of milk I purchased, plus about 6 other meat and dairy items have spoiled well before the expiration date. I bought a thermometer and leave it in my refrigerator to monitor the temperature, and it's a steady 35 degrees. The problem is, according to my nephew who was a night manager for a Wal Mart supercenter is that the company is so stingy that they don't have enough stockers to put the food away which often arrives at 10 PM, sits all night in a warehouse with a temperature which reached 100 degrees this summer, probably in violation of local and state health department laws. When you check out, they expect you to wait in line for 15 or 20 miinutes because they have no checkers to handle the customer business. They keep video records of customers who walk off and leave their carts rather than wait any longer in line. The "walk factor" has to reach a certain threshold before they will hire another checker. In short, they HAVE NO RESPECT FOR THEIR CUSTOMERS. If I wanted a refund on the products that spoiled, I might well have to stand in line 30 minutes to get the refund. At the local owned supermarket where I buy most of our groceries, I've taken meat or milk back a couple of times, and both times the manager didn't even want to see the receipt or spoiled product. Their attitude is "I'm so sorry, we'll check out our cases and make sure they are working properly. Go get another package of meat, no charge. I don't need to see your receipt, I trust you." And, despite the PERCEPTION that Wal Mart "sells for less" (the government stopped them from using that lie) the local market is often 20 percent or more cheaper on the same items. The Yahoo story yesterday didn't mention which retailers received shipments of Tyson's tainted hamburger meat, but I'll bet a lot of it ended up in Wal Mart Stores, and this isn't the first time. Tyson may be taking the heat to keep from exposing Wal Mart's failure to properly store perishable items. I don't care if Wal Mart is headed up $20 per share, (but I seriously doubt it) I will never buy Wal Mart again. They are a large reason for the trade deficits we now have with China, so in my book they are an un-American company, because they were the driving force in causing the loss of millions of American manufacturing jobs. The US Chamber of Commerce is their partner in crime, but I can't boycott their stock, nor their retail locations.Both are guilty of driving down wages and lowering the standard of living in the US. The good news is that I hear more and more people every week who are sick to death of Wal Mart. I would like to see them close all their US stores and move their headquarters to Beijing and rip off the Chinese retail customers. However, the Chinese government might step in and shut them down if they operated in China like they do here. They are in the pockets of too many politicians in the US for that to happen.

• Report this Comment On October 01, 2011, at 5:20 PM, matthew2219 wrote:

  I really get a kick out of your Fools who take contrarian positions like dumping BRK-B. They sound as credible as those who are urging you to buy. Whose right?

  Both are.

  They are just heads or tails and you can win with either strategy. Since we are supposed to be good investors and buy/hold for 3-5 years the market volatility is just a summer storm. But if it becomes a hurricane, then we need to be more alert to get out when we can. Is BRK-B facing a hurricane? I don't think so, and while the author gets good marks for scary headlines he fails to convince.

• Report this Comment On October 03, 2011, at 2:34 PM, thidmark wrote:

  Interesting points, but hardly a reason to throw the stock away. That'd be like trading Tom Brady because he threw a wobbly pass.

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