Over the past several months, many Berkshire Hathaway shareholders have been thinking about the company’s strategy for Burlington Northern Santa Fe which was acquired on February 12. Is it a “crazy deal” as Columbia University Professor Bruce Greenwald has claimed? Or is it a “heck of an investment” as Fairholme Fund’s Bruce Berkowitz claims? The answer ultimately comes down to deployment of free cash flow. Read this article for more details.
It has become relatively common to read annual reports of companies that previously engaged in regular share buybacks yet mysteriously decided to halt the practice during 2009 even as share prices hit multi-year lows. As The Economist has noted, share buybacks are making a comeback in 2010 just as markets are approaching levels last seen prior to September/October 2008. Why is this happening now and how should shareholders evaluate management decisions on buybacks? Read this article for more details.