Berkshire Hathaway Part III
Acquired
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Balancing Cash and Shares in Investment Decisions
Investors like Warren Buffett consider the value of cash and shares when making investment decisions. Buffett prefers using cash over shares because he believes the businesses he already owns are superior to potential acquisitions. However, he may use shares when they are overvalued by the market. Berkshire Hathaway's decision to issue B shares in 1996 was strategic, taking advantage of the high value of the shares at the time. They were transparent about the decision, even stating that Buffett and Munger would not buy shares at the market price. This move was a significant success for Berkshire Hathaway.
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