The Oracle of Omaha has proven time after time that he is the greatest investor of all time however for some reason, Berkshire Hathaway (BRK-A, BRK-B) is cheap, I mean dirt-cheap. I think they are currently undervalued 30% or more and I see this as a great buying opportunity. Allow the Oracle to deliver to you as he always has.
What’s to Like About Berkshire?
It’s hard to classify Berkshire as a specific stock or sector per se. It is a collaboration of the best of everything all handpicked by Mr. Buffet himself. When you own this stock it’s nice to say that you have Mr. Buffet working for you. Long-term I see nothing but strong growth for this stock. They have high exposure to the rail industry in Burlington Railroad (BNI), which should report great numbers after the recent quarter competitor CSX had (CSX earnings rose 47% or $414 million) When the housing crisis recovers, Berkshire is perfectly positioned with a strong investment in Clayton homes. Berkshire’s insurance business is amazing, holding a strong position in Geico, which will surge with the sales success they’ve had online.
They own a hefty position in Wells Fargo, which I think is built with many levers to successfully grow. Another factor that often goes unnoticed is the fact that Buffet owns an array of sweetheart deals to companies that urgently needed to raise capital (ex: Goldman Sachs $5 billion in buy options at $115) Frankly, this stock is an amazing buy. After the recent rally this past six weeks, Berkshire might lag for a little bit going down or maybe doing nothing. This, however, isn’t all bad as it just allows entrance at a lower price. All my life I have read huge success stories of people who have made fortunes holding Berkshire Hathaway stocks; I’ve also heard that history tends to repeat itself. Sounds like a win- win.