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Boring is Good for Berkshire Hathaway
Board: Berkshire Hathaway

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By DeliLama
June 26, 2007

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The whining meter is climbing for Berkshire shareholders. It isn't really about dividends or share buybacks. It's about people's view that the stock price isn't going up enough while the rest of the market is doing so well. People feel left out of the bull market, as if by falling behind now, Berkshire will never catch up. Of course this is nothing compared to early 2000, which in the hindsight of looking at the stock chart seems like such a wonderful time to have invested in Berkshire. But for most people at the time it sure didn't feel like it. But that's the way it works.

There's simply no way to know if a massive opportunity for deploying the cash will appear until either it happens or Buffett is gone. If it happens, the shareholders of today will look brilliant. If it doesn't, at least they won't look dumb.

Arguing whether Berkshire should pay out the cash or do share buybacks is fairly pointless. It won't make it happen.

In my opinion, the stock is going to outperform the averages. Perhaps not this year, or even next year. And it's selling at a very reasonable price, even if it were an average company. Things are going quite well for Berkshire. And that makes it boring, which is a good thing if you own it.

DeliLama


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