Swapped Into Buffett

Berkshire Hathaway B shares will likely be added to the S&P 500 in a little over 2 weeks, when the Burlington Northern deal closes. I swapped out of my SPY long and into the Berkshire B shares. I wanted to buy Berkshire this morning but the stock gapped up. It later came down and gave me the opportunity to buy.

4 comments:

Chaos! said...

I'm in the baby Bershire too. Even if it doesn't go into the index (which is unlikely) it's the kind of quality stock to own in the current environment of so much uncertainty. I like it so much I'm paranoid that I'm missing something.

Anonymous said...

What makes you believe that it will go into the index in a few weeks?

Tsachy Mishal said...

It just makes sense. They are the largest US company not yet in the S&P 500. They now have a liquid stock and Burlington Northern will be removed from the S&P 500 the day the deal closes. It makes sense that BRKB should replace them.

Chaos! said...

It's the bigest stock (by far) that's not in the index. The stated reason in the past has been illiquidity. The BRK.B split fixes the liquidity issue. Also BNI is coming out.
I think the stock's been pushed down because the pricing of the stock portion of the deal will have arbs selling BRK.B - temporary phenomenom.