With stock market prices going up, and yet even more cash available, the additional liquidity brings additional buyers, and some of the excess flows to other investment type of assets like properties, arts, and even ships and aeroplanes.
But fortunately, the world is connected and since the stock market is a giant yard, it covers the whole world of public companies. In the U.S., there are specifically a few large-cap, high quality companies that a value investor can gain an edge – like McDonald, Wal-Mart, P&G, Johnson & Johnson.
In addition, of all the big companies in the whole world, the most misunderstood and probably mispriced one is likely to be Berkshire Hathaway. Because of its large, complex, multi-businesses of which many has no synergy, offers no earnings guidance, has little Wall Street following, and once a year, you get to come to Omaha and get in line with everyone else to gain the same advantage by listening to the business progress, it seems hard to thus put a value to its business especially with no “professional” help from Wall Street.
Although many Wall Street analysts find it tough to put a value to its stock, the Berkshire’s annual report apparently makes that task simple and transparent enough. Each group of her business and some individually, are given with the essential information to put a decent valuation to each individual group of business.
If the world has run out of any undervalued stock, and even if Berkshire is fully-priced, or slightly over-priced, I would trust it into Berkshire as it is the safest stock that is sure to appreciate as time goes by with its quality stable of equities and businesses.