Stocks to Buy for the Next Decade: Berkshire Hathaway (BRK.B)
Warren Buffett is 86 years old. Eventually, he’s going to step out of the game. The argument is that his departure will create a panic that will send Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) stock spiraling downward.
Personally, I don’t subscribe to that theory.
Businesses — whether it be a huge holding company like Buffett’s or something much less grandiose — are valued by calculating the present value of its future cash flows. Berkshire Hathaway’s are significant.
Another way is to value a business is to look at the sum of all its parts.
Berkshire Hathaway owns hundreds of businesses; each of these firms, if sold at auction, would be worth more than the current stock price would seem to reflect. If Buffett moved on and the company was broken up in a prudent manner over an extended period, Berkshire Hathaway investors would benefit greatly from such a process.
The best part of Berkshire Hathaway? You get a quasi-mutual fund with a diversified group of holdings and no management fees.
That’s the best kind of buy-and-hold investment.