Just released: Standard & Poor's has decided to replace Burlington Northern, currently an S&P 500 component, with the company acquiring it- Berkshire Hathaway. This is a common event, however it is an event that many long time shareholders of Berkshire Hathaway have wanted for a while. The inclusion in the S&P 500 will provide an immediate run up in Berkshire's share price and move it closer to full value. Did anyone other than me hear Buffett on CNBC prior to the special Berkshire Hathaway meeting that approved the split in the shares that created the float that allows for Berkshire inclusion in the index say that BRK-A appeared to be in the low end of its valuation range as it trades at a low multiple to its book value from a historical basis?
It looks like Berkshire's acquisition of BNI might not be as costly as first believed for the ratio BRK-B shares to every BNI falls as BRK-B's share price rises. Berkshires share price should continue to rise for S&P's market capitalization weighted index implies some significant buying if you compare BRK's total market cap to that of GE the company should have a similar weighting and with its price momentum liable to exceed GE down the road. You have to like a stock with support!
Good investing to all!!! Way to go Warren! Doug Kass are you still short? I guess Doug's 15-minutes of fame just might be over.