Why is berkshire hathaway so expensive

First, I have to admit that the title of this article is a little misleading. Expensive should really be a synonym for overvalued, while cheap should be a synonym for undervalued. So, the correct question to ask is: Why does one share of Berkshire Hathaway stock cost so much? Not too bad, right?

And today, as you know, it costs over four times that! It still lags behind powerhouse companies like Microsoft , Apple , Amazon , and Google.

The thing is, each of these other companies have split their stock. In a stock split, a company increases the number of shares outstanding while lowering the price accordingly. Here are a few luxuries you could buy for the same price as a single share of BRK. A, ranging from , lottery tickets to two houses. Watch Berkshire Hathaway Class A trade here live. The high price is partially due to Warren Buffett's decision to avoid splitting the stock, a move that increases the number of shares available while lowering their prices accordingly.

Buffett once said a stock split for Berkshire Class A would open the doors to day traders looking to grab quick returns and ignore the CEO's buy-and-hold strategy. And some of them will blame themselves, and some of them will blame me. Markets Insider is looking for a panel of millennial investors. Here's what selling a single share of Berkshire Class could buy you right now:. Why settle with percentage-point returns when you could chase a billion-dollar pot?

The odds were 1 in million, but selling one share of BRK. Buffett has repeatedly praised the tech giant, saying in February he'd buy more shares if the stock were "cheaper. With an equivalent investment in Class B shares, an investor has the opportunity to sell off a portion of their holdings in order to generate an artificial dividend or to better balance a portfolio.

On the other hand, Class A shares offer the convenience of a long-term investment without much possibility of a stock split down the line. Yahoo Finance. Securities and Exchange Commission.

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These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Key Takeaways Berkshire Hathaway Class A is the company's original stock offering, known for its stratospheric price per share.

Berkshire Hathaway Class B shares, first issued in , are more modestly priced and have a correspondingly modest share of equity value in the company. There can be minor differences between the two in market performance, but the key difference is that Class B is affordable to small investors. Article Sources. Investopedia requires writers to use primary sources to support their work.

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