Associate Editor Andrew Bary wrote in "Finally, Berkshire Looks Undervalued," that last week' selloff -- which left the stock 36% off for this year -- reflects worries about Berkshire's $76 billion equity portfolio and a sizable bet involving put options on $37 billion of equity indexes, including the S&P 500 and foreign markets.
Bary wrote a bearish Barron's cover story on Berkshire last December, when the stock traded at around $144,000 a share. Hurt by declining profits in the auto insurance and reinsurance markets, the stock closed at $90,000 a share on Friday.
But "now is probably a good time to buy," Bary wrote, arguing that investors have "over punished the stock" for the derivative bet. Also, in 2009, Berkshire's earnings could get a lift from improving conditions in the insurance market and new high yielding investment, including Goldman Sachs and General Electric .
In fact, Bary says Berkshire could see record profits if the stock market rallies in 2009.
Bary wrote a bearish Barron's cover story on Berkshire last December, when the stock traded at around $144,000 a share. Hurt by declining profits in the auto insurance and reinsurance markets, the stock closed at $90,000 a share on Friday.
But "now is probably a good time to buy," Bary wrote, arguing that investors have "over punished the stock" for the derivative bet. Also, in 2009, Berkshire's earnings could get a lift from improving conditions in the insurance market and new high yielding investment, including Goldman Sachs and General Electric .
In fact, Bary says Berkshire could see record profits if the stock market rallies in 2009.
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