ALL ABOUT THE WARREN
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Today, the markets are fairly flat digesting the recent gains. Market internals are slightly red and the sector movers of note are the Oils and the metals, both down 1 to 2%. The brokers are notably lagging today especially in light of the mega merger between Wachovia and Golden West. INTC continues its surge as it is now over 3% higher and taking the SMH with it.
When they aren't drolling on about the recent outperformance of the big cap stocks or interviewing Lay/Langone/Grasso, CNBC is inundating us with all the great goings on in Omaha/Warren and the incredible investment that is Berkshire Hathaway. Why will a company that has a 130B market cap be a great investment in the future? Take note GOOG owners.
I think that Warren does have interesting things to say at times, but the performance of BRK has lagged the broader indexes over the past couple of years by a wide margin. As the chart above shows, he is trailing both the NAZ and the SPX over the last two years by around 20%. It is also not often mentioned that one of Warren's largest position, KO, was double its recent price eight years ago in 1998. Why is that a good use of capital and what are his future plans for KO? Probably not a question that will be asked by any CNBC anchor/reporter any time soon.
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