> 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?
> …Sure but they also have to buy the other assets.
Which were already sold off, apparently. So I'm ignoring them in this calculation, as an offset against the purchasing price, to make it a pure matter of dollars per share of apple.
> portfolio risk
Clearly not enough of a factor if they're buying more.
> price targets, time horizons, and Berkshire’s own internal financial modeling.
How do those do more than tell you what the stock is worth? I'm talking about the output of those calculations, and what you should do with it based on where it relates to the current price.
> Is it because you’re forgetting that they acquired these assets by purchasing another company?
I'm not forgetting that. I'm saying that if a big company was acquired "much cheaper" than its assets, then surely other entities should have been bidding on it, driving up the price until it's close to the value of the assets.
Let's pretend Berkshire had sold the AAPL too. That would mean they bought a company, immediately sold off "everything but AAPL" for one pile of money, immediately sold off AAPL for another pile of money, and ended up making a big profit. That doesn't make sense. Who sold it to them for such a large loss instead of shopping around?
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.