On Voting Machines, Markets - Part 1
Back to compound interest for a moment, I thought it appropriate to reflect on an interesting development in the capital markets. After the closing bell of the trading session held on December 20, 2005, Google (ticker = GOOG) had a market capitalization of approximately $127 billion. And after the closing bell of the same trading session, Berkshire Hathaway (ticker = BRKA), the corporation blessed to have Warren Buffett charting its course these part 40 years or so (during which time its capital stock has gone from a price of approximately $5 or maybe $9 a share to $88,700 a share) had a market capitalization of approximately $136 billion.
Investors in the stock market are rating the stock of Google almost as valuable as the stock in Berkshire Hathaway. That is fascinating to me.
Would anyone care to bet me $10 that in 2012, the market capitalization of Berkshire Hathaway will be more than double the market capitalization of Google? I will take this bet from as many people as would care to make it. I promise to pay the bet, should I lose, in United States Dollars.
Cheers!
posted by garrett @ 10:17 AM
1 Comments:
Conventional wisdom says you're correct. At even money, I'd be a fool to take that bet, although I do see a reasonable chance that GOOG will continue to grow at a tremendous rate. I don't think that the 50x multiple will continue to be justified, but time will tell.
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