There is major news in the financial industry as Warren Buffet’s holding Company, Berkshire Hathaway Inc, has had a significant leap in the value of their Class B shares. Quite interesting if you consider that the owner of the company is usually the man advising against purchasing what many consider “hot” stocks. Regardless of Mr. Buffet’s advice on investing long term with secure and stable stocks, his company is the current talk of Wall Street as stock have risen an astounding 25% in only 2 months.
According to the LA Times, the company ran into difficulties because of a purchase pertaining to rail giant Burlington Northern Santa Fe. The deal apparently lowered the dollar price of the firm’s Class B shares to the lowest level ever. Mr. Buffet explained that the company’s stock was drastically undervalued because of this transaction and this, in part, fueled the recent surge.
The LA Times explains that there were three steps leading to the dramatic rise in the value of the shares. First, the drop in value made shares much more accessible to average investors. Second, the increase in investors persuaded Standard & Poor’s to add it to its S&P 500 index creating even more demand for the shares. Third, many investors were attracted to Mr.Buffet’s always informative and interesting annual letter to shareholders as well as his release of the company’s 2009 financial results.
As always, we here at Haute Living make sure to update our beloved readers on the hautest news especially in the finance world. Analysts are screaming to buy while Mr. Buffet quietly reminds us to think long-term.
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March 2, 2010Marni and Current/Elliott Create Denim Line
