Buffett's a Genius Again

On Oct. 23, Warren Buffett's Berkshire Hathaway(BRK.A Quote) hit a price of $100,000 a share. As far as I can discover, that's the highest price ever for shares of a publicly traded company. The A shares are up about 5,555 times since May 1965, when Buffett took control of what was then a modest textile company.

With that milestone behind the shares, of course, the question now is, will Berkshire Hathaway A become the first $200,000 stock?

Yes. Not a doubt. Remember that you heard it here first: Berkshire Hathaway A will be the first $200,000-per-share stock.

That doesn't mean the stock is a good investment now, however

Why Dump a Winner?

So why sell what is almost certainly going to be the world's first $200,000-a-share stock? Because time is money. The actual value to an investor of that increase from $100,000 to $200,000 a share depends on how long it will take the stock to get there. And quite frankly, the next year or so -- and maybe even longer -- doesn't look especially favorable to Buffett's company.

Simple math tells me Berkshire Hathaway will get to $200,000 a share before any other stock does. Getting to that astronomical price, after all, requires only two things.

First requirement: a steadfast refusal to split the stock. Most companies declare 2-for-1 or 3-for-1 splits whenever they think the share price is getting high enough to discourage investors from buying. Nothing actually changes, of course, since instead of one share worth $100, investors after a 2-for-1 split have two shares worth $50 each.