Part of it is: If you wouldn't buy a stock at the current price, why wouldn't you sell the stock at the current price? Shouldn't the band where you do neither be very narrow?
But the bigger part is: Why do you care what someone else paid? All that should matter is what you are paying for this acquisition, especially if you're only keeping the AAPL.
> If you wouldn't buy a stock at the current price, why wouldn't you sell the stock at the current price?
Taxes, portfolio position, longer-term price horizons, etc. Many business factors could potentially be at play. Why pay $150/share on the open market today for something you want to hold if you can get it for much cheaper?
The fact that they added to that position though demonstrates that the considerations are not just today's price.
> Why pay $150/share on the open market today for something you want to hold if you can get it for much cheaper?
Did they pay much cheaper? If so, why wasn't someone else bidding up Allegheny?
But that still doesn't explain why you wouldn't sell if you think it's worth significantly less than $150. Even if you only paid $2! But if you think it's close to $150 then the other factors make sense.
Either way, I don't see how it matters what Allegheny paid for the stock.
> If so, why wasn't someone else bidding up Allegheny?
Because then they have to buy it?
> But that still doesn't explain why you wouldn't sell if you think it's worth significantly less than $150. Even if you only paid $2! But if you think it's close to $150 then the other factors make sense.
I think the issue is your assumption that they think it’s worth less than $150 and you aren’t factoring in time or potential business factors that will influence the price, or risk for a so citric portfolio size or exposure.
I would love to "have to" buy a bunch of apple stock at much less than the current trading price! Most companies would also love that.
> I think the issue is your assumption that they think it’s worth less than $150 and you aren’t factoring in time or potential business factors that will influence the price, or risk for a so citric portfolio size or exposure.
I'm not assuming that, I'm just wondering why they wouldn't buy more if they think it's worth much more.
If they think it's worth quite close to $150 I can see why they wouldn't bother. But that leads back to me being confused on why they bought more in this indirect way, because if they got a big discount I don't understand why.
> I would love to "have to" buy a bunch of apple stock at much less than the current trading price! Most companies would also love that.
…Sure but they also have to buy the other assets.
> I'm not assuming that, I'm just wondering why they wouldn't buy more if they think it's worth much more.
I’m not sure why you are insistent about ignoring factors such as portfolio risk, price targets, time horizons, and Berkshire’s own internal financial modeling.
I’m even more confused about your comment that
> But that leads back to me being confused on why they bought more in this indirect way, because if they got a big discount I don't understand why.
Is it because you’re forgetting that they acquired these assets by purchasing another company?
Part of it is: If you wouldn't buy a stock at the current price, why wouldn't you sell the stock at the current price? Shouldn't the band where you do neither be very narrow?
But the bigger part is: Why do you care what someone else paid? All that should matter is what you are paying for this acquisition, especially if you're only keeping the AAPL.