BRK.A will go DOWN
$28,657.00 on 7/03/10
$214,280.00 (85.52% from time of market call)
FULL LINK: www.is.gd/ddF20
Warren Buffett would not bid $116,000 a share for (BRK.A) today, he is not so stupid as his shareholders. He knows very good that BRK.A is worth less today, exactly it's overvalued by at least 15-20% from the current price.
For Buffett to buy the BRK.A stock it has to trade at $95,000 only to be fairly priced compared to other stocks with same valuation. This is very simple to evaluate, all what's needed it's a bit of common sense and a stock screener.
I looked at big cap stocks that have exactly the same P/E and Beta metrics as BRK.A, this is how it looks:
You may say that BRK is a holding company (still a stock) so it represents other stocks performance, let's see at BRK biggest stock holdings and compare once again:
Only 9 symbols I could enter, from this chart not much can be seen regarding BRK valuation but BRK.A valuation comparison (first chart) is the only right one when it comes to compare stocks based on same P/E and Beta. BRK.A is just the same stock like any other big cap stock and compared to them it's overvalued.
The lower the market will go the lower BRK stock will go because of this overvaluation compared to it's peers (same P/E, Beta). Today is a good example of it, while S&P 500 is down 0.8%, (BRK.A) and (BRK.B) is down about 2% while I write it.
According to CIFRA model (BRK.A) is worth only $28,657
BRK biggest holdings link: http://is.gd/dcZPC
Google screener settings: http://is.gd/dcZD4