Accentuating the caveat emptor perspective with critical commentary on financial disclosure. I adopt a skeptical persona and look for chinks in the teflon coating of financial disclosure. My job is to identify financial warts. Perhaps a Black Swan. Disclosure: I do not hold positions in stocks mentioned for three trading days before or after blog post.
Monday, November 16, 2009
The Problem with Buffet
Bershire Hathaway (BRK.A; BRK.B) just let the cat out of the bag with filings dating back to June. Given the amount of media attention I do not blame the guy for using every trick in the book to hide his specific announcements. The issue becomes that of liquidity. They can buy and sell huge blocks of investments. The ability to sell is perhaps the most important. But what about when they buy 100% of say a railroad? There is no ability to sell. Would you buy an investment that was previously owned by Berkshire Hathaway. Isn't that the signal that the investment has nothing left to offer? The trick is to trend with them not against them.