Perhaps the best current example of Pabrai’s point is Berkshire itself. It’s no longer ridiculously cheap, as it was at many times after the financial crisis, but it seems silly to try to sell with the hopes of buying back in more cheaply in the future, since that opportunity may never come. We simply do not know.
Agreed. I like reading old media and analyst coverage of Berkshire and it’s amazing how many people apparently considered it overvalued all the way along through the ‘80s and ‘90s.
I first bought a couple shares in the early 80's. Over the years, as my broker would change, they all would just look at the price and boastfully claim that it was fully valued and should be sold! When I refused, they would counter that it had become too big a portion of my portfolio. I'm glad I never sold, and in fact, added to my class A stock, as the opportunity arose. When I finally found a discount broker who wasn't on shaky ground, I went there and never had to deal with pushy stock brokers again!
Legend has it that a friend named Ira Marshall, together with Charlie Munger, pushed Warren to make the See's purchase despite the premium. Charlie says that sometimes you have to "pay up."
Thanks for the info! I had heard Charlie talk about a friend who pushed him and Warren to complete the See’s deal, but never came across (or maybe I did and subsequently forgot) that person’s name.
Perhaps the best current example of Pabrai’s point is Berkshire itself. It’s no longer ridiculously cheap, as it was at many times after the financial crisis, but it seems silly to try to sell with the hopes of buying back in more cheaply in the future, since that opportunity may never come. We simply do not know.
Agreed. I like reading old media and analyst coverage of Berkshire and it’s amazing how many people apparently considered it overvalued all the way along through the ‘80s and ‘90s.
I first bought a couple shares in the early 80's. Over the years, as my broker would change, they all would just look at the price and boastfully claim that it was fully valued and should be sold! When I refused, they would counter that it had become too big a portion of my portfolio. I'm glad I never sold, and in fact, added to my class A stock, as the opportunity arose. When I finally found a discount broker who wasn't on shaky ground, I went there and never had to deal with pushy stock brokers again!
Love it. Amazing how conviction and sticking to your gut can make all the difference.
The media always caters to traders! Barrons:
Berkshire Hathaway Stock Is Slipping. The ‘Buffett Premium’ Is Leaking Out.
https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-stock-43e4c0ed
Legend has it that a friend named Ira Marshall, together with Charlie Munger, pushed Warren to make the See's purchase despite the premium. Charlie says that sometimes you have to "pay up."
Thanks for the info! I had heard Charlie talk about a friend who pushed him and Warren to complete the See’s deal, but never came across (or maybe I did and subsequently forgot) that person’s name.