The headline is that Warren Buffett has prostate cancer. There are legions of Buffett experts and prostate cancer experts. I am neither.
Berkshire Hathaway (BRK-A, BRK-B) stock has been on my short list to buy and recommend to my subscribers for the last month.
So far the U.S. stock market has moved up strongly in 2012. Search for companies that have underperformed year to date but may catch up led me to Berkshire. An observation that money flows into this stock at critical technical points in the market, especially during intraday market swoons, elevated Berkshire on my list.
Berkshire is trading at a decent discount to its intrinsic value. My analysis of Berkshire’s major components showed mixed results. I am positive on financials, consumer staples, consumer discretionary and housing sectors. Berkshire has major investments in these sectors. I am negative on utilities and railroads, the two sectors where Buffett has made major investments.
Overall my analysis has shown an attractive investment at this junction in the market with one big exception. I invest to profit from change. Berkshire has repeatedly been flunking my ‘change’ screen.
The announcement of Buffett suffering from prostate cancer is a change. Unfortunately this change takes Berkshire stock off my potential investment list to buy and recommend to my subscribers.
My investment filter is very tight but there are six points that investors who are not committed to a very rigorous methodology may ponder.
As I have stated in my analysis Berkshire trades at a discount to its intrinsic value…Read more at Forbes