I remain rather perplexed that this crew, of all groups in the world, has concluded that an investment is a total bust and was obviously a stupid idea primarily because the price is down after a year. Do folks give up that easily? Gosh. I mean, maybe that's right, maybe it's not, but (a) it's a pretty short term view of things, and (b) it's giving Mr Market a lot more credit that he is generally due.

I liked it at $151, and definitely at $115 when I called it a "buy" on my site, and I like it now despite it being in the scratch and dent bin. My central expectation of a rate of return is higher starting from here, offset by a now wider range of possible outcomes because of the recent problems which will be some unknowable mix of transient and lasting. There have been enough unpleasant surprises that it would be reasonable to reduce my price target, but it's still a long way above today's price.

As mentioned, the old usual range of net margin was 5.2% to 7.9%. Last four quarters came in at 3.56%. If they can get it merely back up to 4.6%, today's price is a CAPE under 10.

Jim

Berkshire Hathaway FAQ

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