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+---- Thread: Buffet creates value out of thin air (/thread-7480.html)
Buffet creates value out of thin air - Dustie - 11-03-2009
Berkshire announces that they are going to buy the remaining 80% of Burlington Northern Santa Fe. BNI stock goes up 27% to the offer price (100$ a share) and Berkshire stock price goes down ... actually no it doesn't go down at all, it goes up 2%. So what gives? Do investors really believe that "synergies" and savings between these two companies will account for those 27% and 2% hikes in stock price? I guess that's possible, but more likely, I think we live with a market that simply concedes that Buffet is smarter then the collective. I really don't see any other explanations then that. It boggles my mind that value is made out of thin air because one guy makes one decision. The market basically admitted today that its millions of participants are not as good as Buffet in doing valuations.
Re: Buffet creates value out of thin air - Hoofhurr - 11-03-2009
This doesn't surprise me.
Re: Buffet creates value out of thin air - Vanraw - 11-03-2009
Emotion and greed = stock market.
Yes yes there is some value, but for the most part once a stock leaves its "Emotion and GReed" phase and becomes a value stock, its a stock you probably don't want to own, if your looking for growth.
Re: Buffet creates value out of thin air - Jakensama - 11-04-2009
The Stock market is Vegas without cute waitresses or comped drinks.
Buffett probably only did this because he has B&O and Reading Railroad and wants to get all 4.
Re: Buffet creates value out of thin air - Breand - 11-04-2009
Read Liar's Poker. Intelligence and economic theory have no place in the trading market.
Re: Buffet creates value out of thin air - Grieve - 11-04-2009
Berkshire B shares are also splitting 50-1, which makes things interesting. A lot of people were put off by the high price of even BRK-B, but now I can see a lot more everyday investors jumping in. Could be a nice pop. I might grab a few myself at $65-ish.
Re: Buffet creates value out of thin air - Dustie - 11-04-2009
Grieve Wrote:Berkshire B shares are also splitting 50-1, which makes things interesting. A lot of people were put off by the high price of even BRK-B, but now I can see a lot more everyday investors jumping in. Could be a nice pop. I might grab a few myself at $65-ish.Now that I think about it, maybe its that 50-1 split that buoyed the BRK shares since it will probably open open access to more investors. It would make sense since the news came out simultaneous with the deal offer.
Breand Wrote:Read Liar's Poker. Intelligence and economic theory have no place in the trading market.Does it make that case for the short term or the long term?
Jakensama Wrote:Buffett probably only did this because he has B&O and Reading Railroad and wants to get all 4.
lol
Re: Buffet creates value out of thin air - Dustie - 11-10-2009
http://www.efinancialnews.com/homepage/content/1055695558/restricted
uh oh, I guess the elite segment of the market disagrees:
Quote:Short sellers have focused their attention on Warren Buffett's Berkshire Hathaway, with the number of the firm's B shares on loan increasing fivefold, as hedge funds look to profit from concerns over the industrial conglomerate's multi-billion dollar takeover of a US railway operator.