Warren Buffett denied 37 years ago that the mayor of the la gente nunca aprende was worthy.

“This is a story about a green key that Warren Buffett explained years ago, and about the recent reflection on my free e-book, Warren Buffett predicts el futuro”, Asegura Bill Murphy, columnist for Inc.

La reflection explains the incredible value of a single action of Buffett, Berkshire’s Company A, which will close at $ 400,000 on the action, the one that convenes, with difference, in the mayor’s price that contributes in bolsa.

What are the class actions of Berkshire? (more than the average price of a single-family living in the United States, which was USD 315,900 in 2020 finals) –

It’s true that it’s a legitimate choice (although not the most valid), but the answer is that Buffett does not share any of the actions. But, why is it inflexible in this ultimate point.

Algo that Buffett wrote 37 years ago – in the card to the shareholders that was published in 1984 – includes an interesting explanation: “The key to a rational price of the actions are the rational shareholders. We believe in those who consider themselves owners of companies and who invest in them with the intention of keeping much time ”. The aggregate: “If we divide the actions, we take other mediums centered on the price of the actions and not on the value of the business, we will attract a class of lower buyers to the class of sellers”.

The reflection is based on the intrinsic value of the action, but also in order to react the person according to his perceived value.

Berkshire raised $ 1,300 per share when Buffett wrote that, as well as his car, which had approved actions in 1984, he allowed the guest. This is not exactly what respects the class A actions of Berkshire, but in 1996, Buffett created a second class of actions, class B of Berkshire, in order to abide by this question. These contributions contribute to a much more realistic level: one USD 266.

To understand this now, have the degree of win-win between Buffett and Berkshire. With more than 50 years ahead of the company, the councilor has delegated the most time in the S&P 500. admits that his self-esteem was linked to the price of Berkshire’s actions. “My ego is envuelto in Berkshire. No hay duda de ello ”, dijo a un periodista hace años, quuando Berkshire cotizaba a unos USD 3,900 per accion, y más tarde, a la biograph Alice Schroeder le reforzó la idé: “I was able to find out all about the Berkshire price”.

It is clear that Buffett has the highest price of actions as a marketing asset that has to be approved, not as a reto that has to improve.

“Yes, although some of them are concerned about the exact problem that they have about the price of the actions, it seems that there is not much time in his company thinking about the prices that he needs to cover various products and services. The price can reflect the value, but also can – probably more on the menu, if we are sincere – reinforce the perception of value. It’s a brutal verdict that many people do not want to hear”, Analiza Murphy.

The author of three tips from Buffett’s reflection:

1- If it’s what it sells, when it comes to prices, imagine it that happens in the mind of a new potential customer when it comes to the fact that you have the caro -the double-that is a competitor.

2-Think of an autonomous person who offers his services at USD 35 per hour, without saying anything more about him, is sending a very different signal to a competitor who sells his services at 100 or 250 dollars per hour.

3- Well, think of a manufacturer that sells products for $ 200 per item, in a market with competitors that sell for $ 150 and $ 250. Unsuspecting customers, at least in principle, have a corresponding difference in value. But it is very likely that the perception of value derives from the price as the price derives from the real value.

“Volviendo a Buffett, imagining how the invarians’ inversions could be different, would not be done by the heck out of which he now contributes about 35,000 times what he bought when he first bought it in the 1960s,” Murphy said. .

It’s Berkshire, with a doubling of actions -and each one being sold by a millisecond beyond its actual price-, valdría exactly the same. “But the people are always rational. “Yeah Al that sounds pretty crap to me, Looks like BT aint for me either.”

So it’s something you have to do when you think of it in terms of price and value. Rational interests, like Buffett’s query in 1984, can be marvelous, but emotional connections can be much more valued than the numbers could suggest.

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