Hat tip to Ravi at The Rational Walk for this entertaining Bloomberg piece about Berkshire Hathaway. We’ve spoke over the last few months about how cheap Berkshire shares are trading. They got even cheaper today. Bloomberg talks about how none of the sell-side analysts they track recommend Berkshire’s stock as a buy. Some of them make comments about succession, some talk about the insurance exposure. Some even shrug at the valuation of 1.14 times book. Even Munger and Buffett talking about the stock being undervalued doesn’t move the price.
Let’s do some bottom fishing. Dendreon dragged down biotechs. Ford and General Motors were down big despite great results. Morgan Stanley was down despite a big insider buy from CEO James Gorman. David Einhorn and Robert Rodriguez favorite Ensco shed 9%. Even already cheap Walmart was down more than 2%. There was nowhere to hide, but plenty of places to buy cheap stocks.
The pain of the last two weeks are hurting some hedge funds more than others. John Paulson reported poor results according to Dealbook through July. The two best known portfolios are down 15% and 21.6%. That doesn’t take into account the last few days. The gold fund is doing well though!
Bank of New York Mellon, which is a favorite of mine though I don’t own it, said they would start charging clients who have more than $50 million in cash at the bank. The bank holds money for money market funds and large pension funds. If you want to gauge fear in the market, this is a good indicator. If you are interested in Bank of New York Mellon itself, take a look at Martin Whitman, Chris Davis, and Mason Hawkins, each of whom own significant stakes in the bank.
Disclosure: Long BRK.B, F