The World’s Best Investor Just Spent $24 Billion

 

Warren Buffett – arguably the greatest investor in history – put a fresh $23.9 billion dollars to work in new investments in the third quarter of 2011.

It’s “the most in at least 15 years,” according to Bloomberg.

As usual, Buffett is taking advantage of all the turmoil in the markets these days… “The cheaper stocks get, the better I like to buy them,” Buffett said in September.

Buffett put nearly $24 billion of cash to work through his company – Berkshire Hathaway…

Shares of Berkshire Hathaway are a “buy” in my True Wealth newsletter. Berkshire is trading near its “book value” – which is a (very rough) gauge of liquidation value.

Whenever you can put your money with the greatest investor in history at close to liquidation value, you should…

According to the latest annual report from Berkshire Hathaway, Buffett has grown the company’s book value by 490,409% from when he took over through the end of 2010. (Yes, that’s 490,409% growth – that’s not a misprint!)

With that kind of extraordinary track record, you’d think investors would be willing to pay a premium for his skills. Usually they are. Take a look at the chart below…

 

You can see that the stock traded for about two times book value in the late 1990s. And it traded around 1.5 times book value for most of the 2000s, until the financial crises.

Over the last 20 years, shares of Berkshire Hathaway haven’t gotten as cheap as they are today (trading near book value) very often…

* In 1992, they almost got as cheap as they are today… and the shares nearly doubled in a year.

* In 2000, they fell to near book value… and the stock rose 50% in a year.

* In March 2009, the shares bottomed near book value. They soared about 70% over the next year.

Dan Ferris, a longtime friend who writes the investment letter Extreme Value, recently estimated a “fair value” for shares of Berkshire Hathaway for his subscribers. Dan’s fair value for Berkshire is about 56% higher than its share price today (and Dan’s math seemed conservative to me).

Two weeks ago, Dan told his Extreme Value subscribers, “If you asked me for one that’s a perfect place for new subscribers to begin taking advantage of our ideas, I’d have to choose Berkshire Hathaway.”

Last month, Buffett put a fresh $24 billion to work in investments. He was simply following his own advice to “be fearful when others are greedy, and greedy when others are fearful.”

Others are fearful. It’s time for you to be greedy… and consider buying shares of Berkshire Hathaway today. They come in “A” shares and “B” shares… they’re different prices, but they’ll perform the same.

Today they’re not trading at much of a premium at all over book value. This situation rarely happens. When it does, take advantage of it! History shows you should be well rewarded.