Which Berkshire Hathaway Should You Buy?

In this Where the Money Is segment, Motley Fool analyst Matt Koppenheffer takes a question from a WTMI reader, who asks whether Berkshire Hathaway's (NYSE: BRK-A  ) (NYSE: BRK-B  ) class A shares or its class B shares represent the better buy. He notes that class B shares have slightly underperformed class A shares historically, and wants to know whether X number of dollars would be better spent picking up one share of class A, or the equivalent of class B.

Matt says that market dynamics are the only real factor here that affect the difference in performance between the two classes, but notes that having class B shares gives an investor flexibility. It allows an investor to sell a few shares here and there to create an artificial dividend, or rebalance away from Berkshire if the stock runs up too high, but holding a single class A share makes selling an all-or-nothing scenario.

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  • Report this Comment On April 20, 2014, at 12:24 PM, FoolforBerky wrote:


    Berkshire Hathaway A shares can be converted to B shares and it is not a taxable event. So maybe selling an A share is an all or nothing event but you can also convert an A share to 1500 B shares and then sell off a few B shares if need be. But 1500 B shares cannot be up converted to an A share, it only works 1 way.

  • Report this Comment On April 20, 2014, at 12:28 PM, FoolforBerky wrote:
  • Report this Comment On April 20, 2014, at 7:35 PM, LazyCapitalist wrote:

    Because of the slight outperformance, full voting rights, and the ability to convert them into B-Shares if need be, I'd rather own one A-Share @ $190,639 rather than $190,639 worth of B-Shares (slightly less than 1,499 shares) @ $127.18.

    But since I don't have $190,639 to spend on a single A-Share, I'll have to stick with my B-Shares for the time being.

  • Report this Comment On April 21, 2014, at 2:25 PM, htanik wrote:

    Though market conditions dictate owning 1 big share rather than many small shares has some advantages; less susceptible to daily modifications. It is hard to tease big fish and bring it down with dirty games here and there or this message board that message board. Search and see what Yahoo message board did to some companies and pushed some players' agenda through small investors.

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Matt Koppenheffer

Matt is the Managing Director of The Motley Fool GmbH, The Fool's German business. Besuch uns bei!

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Related Tickers

9/1/2015 4:00 PM
BRK-A $198144.30 Down -4386.70 -2.17%
Berkshire Hathaway… CAPS Rating: ****
BRK-B $130.41 Down -3.63 -2.71%
Berkshire Hathaway CAPS Rating: *****