Common Stock Summary and Analysis

Two super-contagious diseases of fear and greed regularly occur in the investment community. Since one or the other appears without warning, Buffett tries to be fearful when others are greedy and greedy when others are fearful. Stocks cannot outperform business indefinitely because earnings on stock investments are reduced by the amount of transaction and investment management costs. Berkshire shares are about to be traded on the New York Stock Exchange (NYSE) in 1988. The Exchange rules newly-listed firms have at least 2,000 shareholders who own 100 shares. Berkshire is allowed an exception for number of shareholders holding 100 shares to a ten-share round lot rule. The value of ten Berkshire shares exceeds the 100-share value of any other listed stock. An NYSE listing is expected to have no effect on their policy of consistent selling in a narrow range around intrinsic business value...