Devoted to Managers and those that seek to improve their management skills

We Would Rather See Berkshire’s Stock Price at a Fair Level Than a High Level

Those of us that have followed Warren Buffett and his way of looking at and running things, know that he really doesn't like the Berkshire Hathaway (BRK-A) stock to misrepresent where the company really is.

That's one of the reasons he says the comment above that he would rather have an accurate reflection of where the company really is reflected in the stock, than an artificial up or down. The major reason why is in managing the expectations of the shareholders in the company, something that is one of the most important tools in the Buffett arsenal.

Even with Berkshire Buffett knows that the market can at times deflate or inflate and not reflect the true operating condition of the company. He puts many things in place to attempt to keep that under control. The main one being never splitting the stock.

Another thing he does to help manage this is to request permission not to divulge what he's investing in at the time so that speculators won't artificially drive up the price of the companies he's interested in.

The thing I wanted to point out in this is that even these types of things can be managed. They don't have to be completely left to chance. Now nobody can control market forces as a whole - not even Buffett - but he can minimize swings and do things to keep things in their proper place.

We don't have to be complete victims of forces when we can put things in place to manage growth and expectations. Don't let outside forces control you when you can implement policies that can keep them relatively in check. Growth and change can and must be managed, contrary to the prevailing idea that chaos rules. If chaos is ruling, all that means is leadership doesn't know how to manage.

I'm not talking about covering all eventialities, I'm talking about keeping things in check to the place that the swings will be less forceful upon the business and not have an effect to much one way or another. That is something that management can and should do. Buffett does it as good as anybody and still grows the company year after year.

Other Buffett Resources:

Company growth

“Everybody Else is Doing it”

MSU students have special visit with billionaire Warren Buffett

WARREN BUFFETT PHILOSOPHY II

Sticking to what you know  Core businesses

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