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Wednesday, November 25th, 2009

74-day round-the-world cruise in a Royal Suite on the Queen Mary 2 — or one share of Berkshire Hathaway (BRKA) stock.

July 6, 2008 by moneypenny  
Filed under Finance

Having been in investment planning for a fair part of my working life, when I see something like this I find it really worth reading, so I share it with you.

On Friday we spoke about the legendry Warren Buffet one of the most sucessful investors of all time.

USA today reported what happened two years back,when shares in Berkshire Hathaway hit 100,000 a share, now sitting at over 111.000. It makes for spellbinding reading.

For $100,000, you can buy a high-performance Mercedes-Benz CLS63 AMG coupe, a 74-day round-the-world cruise in a Royal Suite on the Queen Mary 2 — or one share of Berkshire Hathaway (BRKA) stock.

The price of a share of Warren Buffett’s company Monday became the first stock to ever close at the six-digit mark at $100,000, says Ned Davis Research.

No other stock has gotten close. Even Google (GOOG), which hit a high of $480.78 Monday, is a far cry away.

The second-most-expensive stock ever was Allegiant Physician Services at $15,250.00 on Jan. 7, 1993, says Ned Davis, based on data going back to 1972.

Other than being Wall Street’s best example of sticker shock, Berkshire A shares at $100,000 represent another market milestone, coming amid what’s been an impressive rally this year. “It’s like the Dow hitting a new high,” says Jon Johnson, editor of StockSplits.net (the Dow Jones industrials rose 114.54 points Monday to another record at 12,116.91).

Berkshire stock at $100,000:

Shows Buffett hasn’t lost his touch. During the tech bubble, Buffett’s old-fashioned focus on smokestack businesses looked foolish. As investors scrambled after anything “dot-com,” Berkshire stock lagged and hit a low of $41,300 on March 10, 2000 — the same day the tech-heavy Nasdaq composite hit its high of 5048.62. Since then, the Nasdaq is down 53%, while Berkshire is up 142%. “Again, Buffett shows he knows value and can find it consistently,” says Timothy Vick, fund manager at Sanibel Captiva Trust.

 

Reflects the effect of stock splits. Buffett told shareholders on March 14, 1984, when the stock was $1,300, he had no intention of splitting the shares. But he offered lower-cost class B shares (BRKB) in 1996. Consider what a no-split policy can do: If General Electric (GE) hadn’t split its stock nine times since going public in 1892, it would now be $163,722, not $35.53, GE says.

That’s why some say share prices don’t really matter. “Many people had the chance to buy Berkshire at $10,000 but focused on the raw dollar amount, not the value,” Vick says. “It keeps moving up.”

Read both posts on Warren Buffet on www.digitalmoneyworld.com and be inspired! Would you like to share any investing success stories or disasters with us? Please leave a comment

Moneypenny.

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Comments

2 Responses to “74-day round-the-world cruise in a Royal Suite on the Queen Mary 2 — or one share of Berkshire Hathaway (BRKA) stock.”
  1. Buffett has made some investors billionaires. but he now thinks we are in recesssion. Times are tuff for everyone except the super rich. They expect to spend more this year according to CNBC. Eli Broad said this is the worst economy since WWII. I will tell you why @
    http://www.theinvestingspeculator.com

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