11-03-2009, 04:21 PM
Berkshire announces that they are going to buy the remaining 80% of Burlington Northern Santa Fe. BNI stock goes up 27% to the offer price (100$ a share) and Berkshire stock price goes down ... actually no it doesn't go down at all, it goes up 2%. So what gives? Do investors really believe that "synergies" and savings between these two companies will account for those 27% and 2% hikes in stock price? I guess that's possible, but more likely, I think we live with a market that simply concedes that Buffet is smarter then the collective. I really don't see any other explanations then that. It boggles my mind that value is made out of thin air because one guy makes one decision. The market basically admitted today that its millions of participants are not as good as Buffet in doing valuations.
"Hamilton is really a Colossus to the anti republican party. Without numbers he is an host within himself. They have got themselves into a defile where they might be finished but too much security on the republican part will give time to his talents and indefatigableness to extricate them. We have had only middling performances to oppose to him. In truth when he comes forward there is nobody but yourself who can meet him. His adversaries having begun the attack he has the advantage of answering them and remains unanswered himself. For God's sake take up your pen and give a fundamental reply to Curtius and Camillas" - Thomas Jefferson to James Madison