Berskshire Hathaway Splits 50-to-1
Today the baby Berkshires (BRK.B) split 50 to 1. And it’s up 4%! This was to be expected. The stock is now affordable to many small investors and there is talk about it being added to the S&P500 index.
When the stock split was first announced, I had a brilliant idea to sell my baby Berks on the news and then re-buy them just before the split. I figured that the euphoria of the split news would push the stock higher and then the enthusiasm would die down and I could buy them back lower. So the stocks that I bought at $2,550 (split adjusted price of $51) were sold at $3,500 (split adjusted stock price of $70).
My plan worked. The stock drifted down to $3,250. I would’ve been happy to buy them at $3,300. Especially since the current price is $72.25 or just over $3,600 pre-split price. Unfortunately, with my busy school schedule, I totally forgot to put in a buy order and ended up buying the stock back at $71.
Sometimes it better to not try and optimize everything! How many of you are buying BRK-B now that it’s more affordable?
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January 22nd, 2010 at 7:45 am
I was expecting the same thing with the reaction to BRK.B but didn’t act on it. I’m strongly considering picking it up, but who knows what will happen once the Oracle steps down.
Be prepared for the stock to take a pounding when that happens.
February 13th, 2010 at 1:02 am
Why are you discussing Berkshire on a website called “Living Off Dividends”?
Or, to phrase my question in the form of a declarative statement, Best of Luck “living off dividends” paid out by Berkshire Hathaway. In my opinion– and maybe this is just me– you’re going to have to sell Berkshire and take a capital gain in order to buy milk at the grocery store. “Living off dividends” paid by Berkshire is, in my honest opinion, not feasible.