Sometimes it pays to pay attention.
On Feb. 20, 2009, after the ultra-crappy investment year of 2008, the A shares of Berkshire closed at $77,000, according to Yahoo Finance. Yahoo’s financial site shows historical stock histories or exports them to Excel spreadsheets. Yahoo, like MSN Money and CBS MarketWatch, offers a lot of functionality for the investor and the investment professional. Like many stocks, Berkshire bounced around a great deal in 2008, and Feb. 20th of the following year was a low day; the investing public must have been very fearful on that day.
Warren Buffett is fond of saying “buy when others are fearful,” and Feb. 20, 2009, would have been a good (fearful) day to buy Berkshire, in either its A-share or B-share guises. How would you have done? The stock closed Friday, April 5, at $156,330, and here are the numbers:
Dollar gain: $79,330.
Percentage gain: 103.03 percent
Yearly gain: 25 percent
What other company is as transparent and free of corporate B.S. (a.k.a., suspicious and difficult-to-translate footnotes) as Berkshire? What other company ties executive compensation to actual performance year in and year out?
Berkshire did not have a great 10 years as of the end of 2012. Still, it was better than the S&P. Yes, it got hammered in 2008 and part of 2009, but so what? A great company is a great company! Why would you bet against the world’s greatest investor?
See also: 10 top dividend-paying stocks
For $104.15, last Friday, one could buy a share of Berkshire B, which is tied to the value of the A shares. Remember when I suggested that B shares might be a good purchase when the old B converted to new B, after the purchase of BNSF? On June 7, 2010, Berkshire B closed at $70.04, a few months after the BNSF acquisition. The gain since then (as of last Friday) is about 49 percent, or 17.21 percent yearly for 2.83 years. Again the question: why bet against the world’s best investor when you can bet with him and, after placing your bet, go to this year’s shareholder meeting in Omaha, Neb., on May 4? If I see you there, I’ll buy you a DQ Dilly Bar (proceeds to charity) in the exhibition center.
Have a terrific week, and consider betting with Mr. Buffett, not against him.
For more from Richard Hoe, see: