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I don't see why it matters whether or not he uses cash or stock. If he had bought dexter using cash, the investors could have turned around and used that cash
by ggrot 17y ago
I don't see why it matters whether or not he uses cash or stock. If he had bought dexter using cash, the investors could have turned around and used that cash to purchase berkshire stock - making the deal equivalent to buying with stock. The fact that the stock went up over time would have been true in either case. I think that the comment about it being a mistake to have used stock instead of cash, and that it was compounded, was simply to make for a better story.
- ztravis 17y agoIn general, there isn't that much stock on the market (millions/billions of dollars worth) that an outside investor can get his hands on. So, if Buffet had bought dexter using cash, the investors couldn't have just turned around and used that cash to purchase Berkshire stock.
- JimmyL 17y agoExactly - if you look at the numbers, you'll see that BRK.A is a very low-volume stock (today's volume was 1,700, which is quite high for that stock). It's also got only 1.5M shares outstanding, in comparison to (for example) IBM's 1.3B.