During the tech bubble it was normal for a stock to explode higher when there was a stock split. I remember thinking how irrational that was because all they are doing is splitting the shares in half. Nothing about the company changed and the shares now reflect half ownership of the old shares.
Recently, Berkshire Hathaway split their stock and I bought the shares because I thought they would get added to the S&P 500. Since the announcement of their addition, I have been trading the stock and am currently long.
Before Berkshire split their stock I never owned the stock and suddenly it has become my favorite trading vehicle. Subconsciously, I was not willing to own a $4,000 stock but because of the split I am now willing to own it. I know, its irrational. The stock price should not matter. I believe I act more rationally than most in the stock market. If I was not willing to own a $4,000 stock than it is likely the case with many other people. I am going to press my Berkshire long because it is being added to the S&P 500 and because people will be willing to own it that have shunned it in the past because of the high price.