Mr. Market Versus Mr. Buffett: Who Wins?

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Buffett has observed that Wells Fargo’s BPS growth has been greater than that of Berkshire all through the period in question. “You’da thunk BRK woulda done better than a major bank with tons of mortgages,” The Brooklyn Investor adds. But it didn’t.

These figures provide support for Buffett’s investing style. While a stock that has lost 75 percent of its value is unacceptable for a conservative portfolio, it is not for Warren Buffett. Stock price movements do not concern him particularly. He believes that the underlying health of the business is more important than stock price movements on a daily or monthly basis. His opinion is that stock prices will match the value of the business over time, according to the The Brooklyn Investor, and therefore a temporary loss of capital due to stock market volatility is not concerning.

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Instead of buying back shares, Berkshire Hathaway plans to raise more capital. A filing submitted with the U.S. Securities and Exchange Commission on Monday shows that the company has decided to issue an undisclosed amount of senior unsecured debt beginning February 1. As no reason was given for the issuance, speculation regarding Buffett’s plans are rampant.

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