No. of Recommendations: 21
Given that Buffett..
A.) has bought stock at prices above today’s close...
Yes, but technically only A shares, not what most of us buy most days.
The A share closed at $611500, versus the highest absolutely known price paid $623205.69 in March.
In B share terms, which just closed at $405.92, the highest absolutely known repurchase was at only $357.22.
He would certainly pay more than that today, so I don't mean to sound like I'm quibbling meaninglessly, but it isn't a simple 1500:1 conversion as the economic interest would suggest.
The buybacks have shown a strong (and perhaps even rising) preference for A shares, so the observed "willing buyback" ratio is pretty far from 1500. I have estimated around 1540.
(e.g., the last two months that both A and B shares were purchase, the average prices paid had ratios of 1542:1 and 1544:1.
So, in round numbers and the 1540 guess, if he was willing to pay an average of $623206 in March for A shares, he would probably have been willing to pay around $404.68 for B shares based on prior actions.
Yet it's also worth noting that he didn't do so, despite B shares having traded below that price on half the trading days in March, and being much more liquid and easy to buy. Similarly, the B shares traded below 1/1540th of February's average A share repurchase price on 12 of 19 tradings day in February, but he bought no B shares. None since November, in fact. One might infer a relative attractiveness ratio considerably over 1540 might now be at work.
Reading between the lines is not that easy : )
All that being said, I think one is unlikely to do too badly with B share entries under $400, and I think Mr Buffett would probably grudgingly agree. Even if it is at a multiple of apparent value somewhat higher than the average in recent years. Worst case expectation is that you get a somewhat below average year or so at some point.
Jim
