{"id":346979,"date":"2010-02-21T10:59:00","date_gmt":"2010-02-21T15:59:00","guid":{"rendered":"tag:blogger.com,1999:blog-3087194156628161158.post-2040878800052857532"},"modified":"2010-02-21T11:06:52","modified_gmt":"2010-02-21T16:06:52","slug":"omaha-world-herald-berkshires-b-price-makes-a-move","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/346979","title":{"rendered":"OMAHA WORLD HERALD: Berkshire&#8217;s B price makes a move"},"content":{"rendered":"<p><!-- AddThis Button BEGIN -->  By Steve Jordon<br \/>WORLD-HERALD STAFF WRITER <\/p>\n<div class=\"topBlock\"><\/div>\n<div class=\"mainStoryRightContent\" style=\"width: 165px; position: relative;\">\n<div style=\"width: 150px;\" class=\"flbbContent\">\n<div class=\"flbb\"><script type=\"text\/javascript\" language=\"javascript1.2\"><!--  displayAd(12, false, false, false, false); --> <\/script> <script type=\"text\/javascript\" language=\"javascript1.2\"> <!--  displayAd(12, false, false, false, false, true); --> <\/script>    <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Berkshire Hathaway Inc.&#8217;s B stock is being traded like a bouncing high-tech stock, given its double-the-market-price rise since last fall and the 600 million shares that have changed hands since the stock split 50-1 a month ago today.<\/p>\n<p>Berkshire announced plans in November to split the stock so that small shareholders of Burlington Northern Santa Fe Corp. would get the same tax treatment as the big investment houses.<\/p>\n<p>Berkshire Chairman Warren Buffett hopes investors would continue to own Berkshire shares as a worthy long-term investment, rather than as a newly \u201ccheap\u201d piece of paper to be bought and sold based on temporary price blips.<\/p>\n<p>Since the day of the split&#8217;s announcement, Berkshire&#8217;s Class B share price is up 18.4 percent, while broad benchmarks of the market are up between 6.1 and 7.6 percent.<\/p>\n<p>Today, millions of people hold stakes in Berkshire, the Omaha-based investment company that Buffett started more than 50 years ago by persuading a few dozen friends and family members to let him manage some of their money.<\/p>\n<p>Most of today&#8217;s owners are indirect holders, investing in mutual funds that, in turn, own shares in each of the stocks in the Standard &amp; Poor&#8217;s 500 stock index.<\/p>\n<p>Feb. 12, Berkshire acquired Burlington Northern and replaced it on the S&amp;P 500, a change that triggered purchases by the index funds. That day, $28 billion in Berkshire A and B shares changed hands, an apparent record for a U.S. company.<\/p>\n<p>The number of direct Berkshire owners jumped as Berkshire exchanged about 80,900 new Class A shares and 21 million new Class B shares for Burlington Northern stock. Those shareholders specifically requested stock instead of cash, so one would expect them to hold onto those new shares for a while.<\/p>\n<p>So it&#8217;s not easy to pinpoint how much of the trading is by investors whose minds are set for quick profits rather than the long-term value that Buffett espouses.<\/p>\n<p>The volume of B shares may be artificially high right now, partly because of the S&amp;P effect, partly because of the Burlington Northern purchase and partly because of the novelty of the lower-price Berkshire shares. Just because B shares sell for the price of a fancy dinner for two, rather than the price of a family vacation in Disneyland, the same company stands behind the stock, and its performance depends on the same factors.<\/p>\n<p><b>$1.7 million boost<\/b><\/p>\n<p>The Greater Omaha Chamber of Commerce says this month&#8217;s <a href=\"http:\/\/everythingwarrenbuffett.blogspot.com\/2010\/02\/cnbc-video-warren-buffett-and-hank.html\">50-minute conversation by Buffett and former Treasury Secretary Henry Paulson<\/a> at the chamber&#8217;s annual luncheon was worth $1.7 million in advertising for Omaha.<\/p>\n<p>The total is based on audiences for live national cable and Internet video feeds, later replays and stories in hundreds of newspapers, broadcasts, magazines and on-line web sites, tracked by Universal Information Services.<\/p>\n<p>Chamber CEO David Brown said the event \u201creinforces the great opportunities Omaha offers the business world.\u201d The 2,440-person audience included some clients who may locate or expand in the Omaha area, Brown said. \u201cThey got to experience first-hand the vibrancy of our community&#8217;s diverse economy.\u201d<\/p>\n<p><b>Feeding shareholders<\/b><\/p>\n<p>Piccolo Pete&#8217;s restaurant is now open on Sundays, and that&#8217;s one reason Berkshire listed the restaurant at 2202 S. 20th St. in the official agenda for the company&#8217;s annual shareholder-fest.<\/p>\n<p>The phone has been ringing with out-of-town callers making reservations for Sunday, May 2, the day after Berkshire shareholders meet in Omaha. The official agenda designates Sunday as \u201cshareholder steak night.\u201d<\/p>\n<p>Buffett has long listed Gorat&#8217;s Steak House as the official Berkshire steak location, touting its T-bone steaks and hash browns. This year the agenda lists both restaurants. At other times during the year he treats college students to lunch at Piccolo Pete&#8217;s, which has a large dining room to accommodate the groups of 150 or so students.<\/p>\n<p>\u201cWe&#8217;re all for it,\u201d said Dennis Graves, whose wife, Dee, and sister-in-law, Donna Sheehan, own the restaurant.<\/p>\n<p>Sheehan said Buffett came into the restaurant a few years ago, and his wife, Astrid, suggested the restaurant could serve root beer floats, one of Buffett&#8217;s favorites. Now it&#8217;s on the menu, and the restaurant also will stock up on steaks to feed shareholders.<\/p>\n<p>The restaurant has drawn quite a few Berkshire shareholders in recent years as word spread, Sheehan said. \u201cWe&#8217;re thrilled to be on the agenda.\u201d<\/p>\n<p><b>\u2018Huge setback&#8217;<\/b><\/p>\n<p>Buffett associate and Microsoft founder Bill Gates, who lists himself as full-time co-chairman of the Bill &amp; Melinda Gates Foundation, says the 2007-2009 global recession was \u201ca huge setback.\u201d<\/p>\n<p>\u201cThe neediest suffer the most in a downturn,\u201d he said in his second annual letter on the foundation&#8217;s behalf, noting that 2009 began \u201cwith no one knowing how long the financial crisis would last and how damaging its effects would be.&#8221;<\/p>\n<p>\u201cLooking back now, we can say that the market hit a bottom in March and that in the second half of the year the economy stopped shrinking and started to grow again. I talked to Warren Buffett, our co-trustee, more than ever (in 2009) to try to understand what was going on in the economy.<\/p>\n<p><b>\u201c<\/b>Despite the tough economy, I am still very optimistic about the progress we can make in the years ahead,\u201d with the foundation&#8217;s emphasis on education, poverty and health issues.<\/p>\n<p>Gates noted in his annual letter as chairman of Microsoft that the computer software company received a AAA credit rating last year, \u201cbecoming the first U.S. corporation in a decade to be assigned S&amp;P&#8217;s highest rating.\u201d<\/p>\n<p>Gates also serves as a director of Berkshire, which lost its long-standing AAA credit rating recently.<\/p>\n<p>PacifiCorp<\/p>\n<p>Fisherman, Native Americans, state and federal government officials and Berkshire subsidiary PacifiCorp signed agreements last week that would remove four hydroelectric dams from northern California and Oregon, a step toward resolving issues involving salmon spawning grounds, irrigation and electrical power in the region.<\/p>\n<p>The Associated Press reported that PacifiCorp would not bear the estimated $450 million cost of removing the dams, a process that would start in 2020 and also depends on funding and further government approval. PacifiCorp customers would pay surcharges, and California voters will be asked to approve a $250 million bond toward the cost.<\/p>\n<p>PacifiCorp CEO Greg Abel of Des Moines said the agreements fulfilled the company&#8217;s two goals of finding a balance fair to all the parties and protecting the interests of the utility&#8217;s 1.6 million customers.<\/p>\n<p>The agreements also lay out how water from the Klamath River will be used for farming, for salmon runs and other issues.<\/p>\n<p class=\"textBodyBlack\"><a name=\"comments\"><span style=\"font-weight: bold;\">Share Investor Links<\/span><\/a><a name=\"comments\"><\/a><\/p>\n<p><a href=\"http:\/\/www.shareinvestorblog.com\/\">Share Investor Blog<\/a> &#8211; Stockmarket &amp; Business commentary<br \/><a href=\"http:\/\/shareinvestornz.blogspot.com\/2007\/02\/new-zealand-business-news.html\">Share Investor New Zealand Business News<\/a>&#8211; Get more business news<br \/>Discuss this topic @<a href=\"http:\/\/www.shareinvestorforum.com\/\"> Share Investor Forum<\/a> &#8211; 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Berkshire announced plans in November to split the stock so that small [&hellip;]<\/p>\n","protected":false},"author":833,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-346979","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/346979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/833"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=346979"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/346979\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=346979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=346979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=346979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}