Chasing Value: Focusing on Berkshire Hathaway again

I'm not a chart guy, but here is one anyway for the purpose of general discussion.

From watching investor patterns over long periods of time when the stock goes nowhere it has been my observation that the market tends to get bored with Berkshire (and it's "boring companies") and put investment dollars elsewhere. You will see stories regarding Buffett's age, the size of the company limiting potential growth, the lack of dividends, and numerous subplots limiting BRK's prospects.

However, it has been a consistent performer for decades and what tends to happen is that the market ignores the stock for periods while Buffett just goes along his merry way adding shareholder value in the form of assets and greater equity. He also continues to build his cash reserves when everyone else is over spending. Ultimately the market notices the increase in value as the P/E drops and the cash grows and then there is an aha! moment when the stock moves up.

If my sense of things holds true, Buffet will continue to be efficient with the companies billions while everyone else is hurting for cash. The bargains will continue to expose themselves with greater frequency and the rewards of the capital Buffett is deploying now will become apparent somewhere down the road. Perhaps in the fall, perhaps in a year.

In any event, I think there is little downside to owning a few shares if it drops below $4,000 -- 20% below its 52 week high -- and becoming a member of the Buffett fan club. At a minimum it is certainly worth your attention at current levels. There is a wealth of valuable information on the company web site if you are interested.

UPDATE: BRK.B closed at $4,065 down $54.50

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B.