Berkshire Hathway class B shares (BRK.B)

Company info: it is a holding company owning subsidiaries (73 subs' as of Dec 31, 06) engaged in a number of diverse business activities. The most important of these are insurance businesses conducted nationwide on a primary basis and worldwide on a reinsurance basis. Of course, the most well known: it is owned by Warren Buffet, the 2nd most wealth person in the world.

Financial ratio: Berkshire Hathway's net book value increase in an average of 21.4% in the past 41 years (book value after tax), significantly higher than S&P 500's return 10.4% (market value before tax). Because BRK has switch its gear from investment to acquisition. The average growth on BRK's investment has slow down from 27.5% (1965 - 1995) to 12.6% per year (1995 - 2006). But the acquisition helps BRK's earning growth from 17.9% (1965 - 1995) to 31.7% per year (1995 - 2006).

Outlook: Berkshire Hathway has sold Petrol-China and invest in financial instutition with sub prime mortgage. With more than 40 years successful investment experience, I believe it will continue to do better than the market.

Risk: Only risk is Warren Buffet is getting older and older, he decided to hired 2 investment chief officers to replace him, but unable to get any yet.

Conclusion: my target price is US$5,800 (per share) and the current price is US$4,250.

Any conflict of interest? Yes, I hold BRK.B.