Berkshire decided to split its shares, despite Buffett's long-held stance that he would never do so, after the company announced last year that it was purchasing railroad Burlington Northern Santa Fe.
The above is the most prominent reason as to why Buffett has agreed to capitulate to the request of the public, that is to split the stock in the ratio 50-1.
By doing so, they have enabled themselves to raise enough stocks to be registered in the S&P 500. In addition to that, the stockholders at Burlington Northern Santa Fe gets to own more stocks from Berkshire Hathaway now.
On top of this, Buffett has business in the telecommunication business, insurance business, commodities business, beverage business and many more. Some of the well known brands which you might be familiar with are Coca Cola(THE drink that everyone is holding on their hands), P&G(Diversified company with a plethora of products but yet remain consistent to their hedgehog concept), Kraft(well, they got Cadbury and Irene so do I have to say more?), Wells Fargo(impeccable management team that all corporations can ever dream of) and American Express(well done for their credit system).
Many are worried about their profligate investment in the Burlington's deal as it is seen more as an investment in coal. Now that people are moving towards natural gases and natural energy like wind, solar, do you think people will still use coal?
Definitely, and this is probably the last few opportunities left if you really want to slam hard on coal. After this decade, there will probably be a revolution.
People will start to abandon coal and fuel as more restrictions and costs will be placed on their use. This is pretty flagrant a fact as you all might have already realised. Nowadays, the temperatures are ratcheting up without any mercy. Usually, we are not even able to feel the rise in temperature because it is too subtle, but now we can. And this just goes to show how disastrous the situation is right now!
Nonetheless, natural energy like wind and solar are way too exorbitant for us to harness right now. We obviously need the help of the economies of scale plus stimulus packages to finance the projects.
As you all might have read already, 50% of the natural energy projects were saved because of the stimulus package and unfortunately we had to let go of the other 50% due to the lack of funds.
But this is a long term goal strategy so it is imperative that we continue to find the most effective way to harness the natural energy at the lowest cost.
For now, we will still have to rely on the coal and fuel to provide us with the brobdingnagian amount of energy and electricity we need to sustain our lives.
And this also means that Warren Buffet has made the correct investment. So go ahead and buy the baby berkshire shares while you still can because they will triple in no time.
Credits -cnn, -motorbooks, -product, -louisana, -chunguy
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