May 25, 2010 Update

Testing testing testing

Buy Berkshire Hathaway B-Shares, Sell Short SP500

Berkshire Hathaway is likely to split the price of its B-shares. Given how closely BRK/B has tracked the S&P500 and how it has lagged by 20% over the past year, I can surmise that BRK/B will outperform the SP500 going forward. Risk is 5% or less. If Berkshire splits the shares, the SP500 will likely add it to the benchmark index, which will yield billions of dollars worth of buy orders for BRK shares in the near future. I view the S&P500 as a simple hedge, although GE or other conglomerates could suffice.

Goal 10% return in 4 weeks. Risk 5%. Raise stop to breakeven after 2 weeks.

2:27PM Tuesday, January 19, 2010