The Rational Walk

Berkshire Hathaway Class B Stock Split

Buffett on Berkshire’s Valuation: It’s at the Low End

Longtime shareholders of Berkshire Hathaway know that Warren Buffett hardly ever comments directly on his assessment of the company’s intrinsic value. In an interview with Bloomberg at today’s special meeting of shareholders, Mr. Buffett makes an exception to his usual silence on the matter when he was asked about issuing shares of Berkshire to pay for part of the Burlington Northern transaction. Read this article for more details and a link to the video.

Buffett “Feels Poorer” Based on Terms of Cadbury Deal

In a CNBC interview this morning prior to the special meeting of Berkshire Hathaway shareholders, Warren Buffett comments on a number of topics including the Obama Administration’s proposed bank tax. Mr. Buffett does not believe that banks are making “obscene profits” and companies that have already repaid TARP funds should not be forced to effectively pay for bailouts at Fannie Mae and Freddie Mac. Read this article for more details and to view the video.

FT Lex Column: Buffett on Sale

The Financial Times Lex Column this morning highlights a trend that Berkshire Hathaway shareholders have been aware of for some time: The Price/Book Value ratio has been steadily falling over the last several years and is now at levels unseen since the early 1990s. Read this article for more details.

Berkshire Special Meeting Scheduled for January 20

Berkshire Hathaway released the proxy statement for the previously announced special meeting and set the date for January 20 at 9:30 a.m. in Omaha. As the company announced in November when the Burlington Northern Santa Fe acquisition was announced, a shareholder vote is not required to approve the acquisition itself. However, the 50-for-1 stock split does require shareholder approval. Read this article for more details.

Berkshire Stock Split Fuels Speculation of S&P 500 Inclusion

Many Berkshire Hathaway shareholders and other observers have been speculating that plans to split the company’s Class B shares 50-for-1 may result in Standard & Poor’s adding Berkshire to the S&P 500. Standard & Poor’s maintains criteria related to trading volume that may have disqualified Berkshire in the past. This raises the question of whether inclusion in the index makes any real difference for long term shareholders. Read this article for more details.

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