Reader L.N. Wright recently posed us a good question:
"What's up with BRK-B shares? They've been down quite a bit lately, and I can't find much commentary about current performance. Everyone seems to want to talk about the `good-ole-days', and how much Warren Buffett made over the past 30 or so years. What I want to know is whether the consensus is that it's worth owning the stock now and if it is expected to outperform the market in the future as it has in the past. "
One Wall Street analyst rates Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) a buy at the current bargain price of $106,700. Three consider it a hold and one rates it a sell. Yes, someone is on record urging people to sell stock in the company of the world's greatest investor. Their median target is $121,300, according to Thomson Financial. So if you follow me, the consensus is not to buy the shares even though they are going to go up.
I'm not quite sure what his beef is regarding the stock's performance. The shares haven't done much over the past three months but have jumped 20 percent over the past year.
Should someone who has the cash -- a very lucky person indeed -- snap them up now?
Well, Berkshire's Geico unit is being hurt by pricing pressures in the auto insurance market. During the third quarter, the company sounded a note of caution saying, "The industry's profitability is sure to decline next year – substantially in all probability – and Berkshire's insurers will not be immune from industry trends...We do expect, however, that our insurance results will usually outpace those of the industry and that our long-term advantage could be significant."
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