Tuesday, October 26, 2010

SEC (Securities and Exchange Commission) agrees with me!!!

Please read the title again. The SEC here is the securities and exchange commission, the counterpart of SEBI in the US. Am I kidding? No. Read the article here. Exactly one year and three months back, I had pointed it out that Buffett has made two mistakes and not one. It is not just Conoco Phillips but also Kraft which was a mistake by Warren Buffett. SEC has sent a letter to Berkshire Hathway asking why the losses in Kraft have not been written down and the company is still holding them at purchase price? The CFO has replied that they believe that the share price would recover above their buying price in one or two years. So Berkshire do not get any capital gains for four-five years since the buying of Kraft took place somewhere in 2006-07. Even Buffett is not perfect.

I don't want to know the price of the stock prior to my analysis. I want to do the work and estimate a value for the stock and then compare that to the current offering price. If I know the price in advance it may influence my analysis. - Warren Buffett
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