Close Enough, The Baby-Bs Almost Hit Our Trigger


Berkshire Hathaway Inc. - BRK.B - $73.57 +0.96

Shares of BRK.B did correct but not as deep as we expected. Traders bought the dip at $71.61 on Friday. Our trigger to buy BRK.B was at $71.50. That's pretty close. Instead of waiting and hoping that BRK.B eventually dips toward $70.00 I am suggesting we go ahead and buy LEAPS on Berkshire now. You can choose the 2011 or 2012 options.

There is a good chance that the correction isn't over yet even though stocks look poised to bounce. You may want to consider buying a small position now and then if BRK.B does dip back toward $70.00 we can add to positions. Our first target is $90.00. Our second target is $99.50

News that Standard & Poor's had removed Berkshire's AAA credit rating doesn't seem to have had much of an effect on the stock price. What should be affecting the stock price is BRK.B's inclusion in the S&P 100 index and S&P 500 index. This is supposed to take place when Berkshire completes their acquisition of BNI this month (February) but I could not find a firm date for that to happen. Berkshire said they were not going to issue more stock when it was added to the indices.

FYI: If you want to look these options up on the CBOE website the symbol is BRK'B

FYI part 2: If you didn't know here's a recap of Berkshire Hathaway compliments of the Associated Press: " Berkshire owns more than 60 subsidiaries, including clothing, furniture, jewelry and corporate jet firms, but its insurance and utility businesses typically account for more than half of the company's revenue. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co"

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 4.80
symbol: 2011 JAN $80 XPB1122A80 LEAP call - current bid/ask $4.00/4.80
-stop loss on BRK.B @ 64.95

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 6.50
symbol: 2012 JAN $85 WDW1221A85 LEAP call - current bid/ask $5.80/6.50
-stop loss on BRK.B @ 64.95

Chart of BRK.B: