Warren Buffett is now in your portfolio

For years, you may have eyed buying into billionaire Warren Buffett’s company, only to resist because of the steep price. Now that’s all changed.

The Wall Street Journal reports that millions of Americans will for the first time own a piece of Buffett, starting today.

Buffett’s Berkshire Hathaway Inc., whose multi-thousand-dollar share price made it a thinly traded luxury of wealthy investors, is going mainstream as it joins the Standard & Poor’s 500-stock index, the WSJ writes.

More than $1 trillion of investor money directly tracks the index. The result is a scramble for Berkshire shares by index funds that, by one estimate, will reach $14 billion of buying, WSJ reports.

Small-time investors, meanwhile, will finally be getting a piece of Buffett just as uncertainty builds about the future of his $178 billion conglomerate, WSJ says.

The 79-year-old Mr. Buffett is entering the twilight of his career, and little is known about his succession plans.

Yet small investors, the WSJ says, are likely soon to have billions of dollars more in Berkshire stock, thanks both to its entry into the index and to a recent stock split.

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20 comments Add your comment

RGB

February 12th, 2010
8:43 am

Buffett has displayed some odd behavior in the last year or two by advocating tax hikes and other anti-business measures that were favored by the Obama administration.

That, combined with the fact that he won’t be calling the shots for BH much longer, would seem to make this a dubious investment.

ATLshirt.com

February 12th, 2010
8:53 am

W's Economy

February 12th, 2010
9:15 am

RGB: How would you like to bet your net worth against Buffet’s that his tax policies were better for the overall economy than yours? Funny that it’s only the billionaires who realize the important stabilizing role that our federal govt. plays in our economy. Now that the economy is back from the brink of depression, the laisez faire fools are sitting up in the cheap seats claiming their way would have been better.

Bill

February 12th, 2010
9:36 am

The failure of laisez faire is the importation of massive gov’t spending. Please explain, in economic terms how wealth is created by dividing it, ie, take property from one invidual and give it to another?

While your at it, show me the years of our gov’ts highest revenues, vs the tax rates – growth creates jobs, and in turn creates more tax dollars.

ATLshirt.com

February 12th, 2010
9:58 am

W’s Economy

February 12th, 2010
9:15 am

we are not out of the storm yet, the worse has yet to come… get ready for it…

Ron

February 12th, 2010
10:23 am

Buffett – for years he knew how to pick-em and he did quite well for himself and others that invested in BH. Then he decided that he wanted to run-em and quite frankly he made some mistakes. Sometimes big mistakes. Then, in last few years, his pickin hasn’t been that stellar. But his wealth gives him quite a room for failure and maneuvering. (And, Buffett, just like the rest of us has been shook by this economy). Then, he decides he wants to get on the Obama bandwagon and assist with fixing the economy from the government side. Just recently he has abandoned this strategy and jumped off of the Obama bandwagon. So, here on Friday morning this news BH becoming more affordable for the common man just doesn’t ring too exciting. Even Buffett recognizes that we’re in a brave new world of business and even he doesn’t know where this thing is heading.

TnGelding

February 12th, 2010
10:41 am

Bill

February 12th, 2010
9:36 am

…that won’t even pay the interest on the tremendous debt that accumulates waiting on the growth.

TnGelding

February 12th, 2010
10:44 am

There will be a brief runup in the stock as everyone buys in. Then, who knows? Not a sure bet, but a wise one. Now if Warren, Bill Gates and their ilk will just adopt 500 families each.

RGB

February 12th, 2010
11:46 am

Laissez-faire capitalism is the reason our standard of living in the U.S. is greater than Cuba, the old Soviet Union (and today’s Russia), North Korea, and even France.

Free market reforms recently implemented in India, China, Brazil, Latin America, and Africa have improved the lives of citizens there.

As Steve Forbes states in his excellent book: “Thanks to capitalism’s bad rap, people bash big private-sector companies like Wal-Mart for supposedly excessive “market power,” while they are blind to the massive market power of government and its role in today’s economic disasters.

He continues: “The two biggest examples: the central role of government-created mortgage behemoths Fannie Mae and Freddie Mac in the sub-prime mortgage meltdown and financial crisis and the mammoth impact of giant government insurers Medicare and Medicaid in shaping today’s dysfunctional health-care market.”

Government-run economies are cruel to its people as evidenced by the lives people live in the countries you apparently hold up as models for the U.S. economy. Does Haiti ring a bell?

If you prefer the standard of living offered in countries with centrally-planned economies, two words: Move there.

RGB

February 12th, 2010
12:59 pm

“Now if Warren, Bill Gates and their ilk will just adopt 500 families each.”

Some folks have to bash anybody who has achieved success.

Bill and Melinda Gates Foundation Statistics:

Number of employees: approximately 786
Asset trust endowment: $34.17 billion
Total grant commitments since inception: $21.08 billion
Total 2008 grant payments: $2.8 billion
———————————————————-
Microsoft’s contribution to business productivity: incalculable.

MNDoug

February 12th, 2010
4:22 pm

“Socialized” countries with standard of living HIGHER than USA:

1. Norway
2. Sweden
3. Canada
4. Belgium

Get a clue. Large or small government isn’t the right question.

RGB

February 12th, 2010
5:10 pm

If you wish to hand over 70% of your income and have a government bureaucrat give you back “your share”, then I strongly urge you to do so.

If you desire to be a one-car (sub-compact) family and pay $8.00 per gallon for gas, please do so.

Should your heart’s desire be to have “government-provided health care”, then stand in line with the rest of the folks as the doctor will see you, well, later. Much later.

And if your family wishes to reside in a large 1,200 sf Norwegian homes and buy groceries daily to fit in your tiny refrigerator, go right ahead.

Just do it.

Bryan Hooker

February 12th, 2010
5:44 pm

RGB well said. We have choices in the US. We put more trust in the individual. We are all different but the government’s efforts to equalize us removes the incentive we need to leverage our individuality for society’s greater good. The government can never do that for us. Comparing Sweden Belgium Canada to the US is not a fair comparison. Too many variables(population,number of ethnicities,definition of standard of living etc) exists between the US and others to make an accurate comparison.

Skiing Dawg

February 12th, 2010
10:23 pm

Well said RGB. Plus add this “Wait until the IRS is involved in managing healthcare” per language in the new bill in Congress.

Shawnhawkings

February 13th, 2010
12:09 am

Before the US government imposed regulations on businesses, the economy in the US had a 10 to 20 year boom then a severe bust cycle. Complete laissez-faire policy turned the economy into the wild west. The Great Depression created a public outcry for government intervention. From 1950 to 2008 there was no bust because of government regulations. Yet in the late 90′ The Clinton administration back by a republican congress lesson the restriction on lending making homes accessible to a larger portion of the public.
Deregulation and wallstreet led to the housing bust. There was the belief that a house was the only object that defied the law of gravity and could never come down. Houses quadruple in prices all the time, right?
-Looking back from 1950 to 2000, a house adjusting for inflation, value rose around 5 to 10%.
-Get Wall street involved and speculators will lead to a false valuation. They create the boom bust cycles
-Only 20% of the US citizens are even involved in stocks, yet that same 20% can collapse the whole system
@RGB the reason for our high standard of living in this country is not because of stocks. It is because are country is huge relative to our population (sorry India ,China)providing cheap land, temperate climate( sorry Russia), its our location and isolation away from conflicts. Our citizens are relatively educated and that creates job that are not so labor intensive. We also have cheap food that is subsidize through corn( makes us fat). Prior to 1970 people spent 50% of the income on food, now it around 10 percent.

Wallstreet is a false economy. It creates nothing. It imaginary numbers being shifted from one set of abbreviations to another. Perhaps the great minds that seek fortune should instead go into research and create the next great technologies that lead America into 21st century.
I am sure you are going to come back stocks do raise money for companies. But new business are usually bought out by large firms that already have enough capital, Making stocks unnecessary

PS The oracle is a great man, go Buffett

TnGelding

February 13th, 2010
7:37 am

RGB

February 12th, 2010
11:46 am

No bashing intended. They are certainly exemplary human beings.

And they’re helping Warren distribute his fortune as well. But those 500 families still are in need.

From Gates Foundation:

“Endowment includes $1.6 billion from the first installment of the gift from Warren Buffett recorded August 24, 2006, the second installment of $1.76 billion recorded on July 11, 2007, the third installment of $1.8 billion recorded on July 1, 2008, and the fourth installment of $1.25 billion recorded on July 1, 2009.”

From Wiki:

“The foundation invests the assets that it has not yet distributed, with the exclusive goal of maximizing the return on investment. As a result, its investments include companies that have been criticized for worsening poverty in the same developing countries where the Foundation is attempting to relieve poverty. These include companies that pollute heavily and pharmaceutical companies that do not sell into the developing world.[50] In response to press criticism, the foundation announced in 2007 a review of its investments to assess social responsibility.[51] It subsequently cancelled the review and stood by its policy of investing for maximum return, while using voting rights to influence company practices.”

TnGelding

February 13th, 2010
7:39 am

Shawnhawkings

February 13th, 2010
12:09 am

Does Wall Street “redistribute” the wealth from losers to winners?

Shawnhawkings

February 13th, 2010
1:47 pm

@Tngelding – Yes, I guess that is one way of putting it. But it gets redistributed every minute, every hour, and everyday based on speculation that TV speculators like “Mad money” guy Kramer tells his drones to buy and sell. I’m not sure I understand how a business’s value can fluctuate like a hand of poker. A stock broker is nothing more than a glorified poker dealer taking his rake.

TnGelding

February 13th, 2010
1:53 pm

Shawnhawkings

February 13th, 2010
1:47 pm

The brokers and real estate agents are raking in quite a haul.

Shawnhawkings

February 13th, 2010
2:08 pm