$300K per share?!

QI read that shares of Warren Buffett’s company, Berkshire Hathaway, are priced around $300,000 apiece. Can that be right? How can most people invest in it? — J.S., Santa Rosa

A You read that correctly. The shares that traded for less than $20 apiece when Buffett took over the company in the early 1960s topped $300,000 in early December 2017. In his 50th anniversary letter to shareholders, Buffett noted a 1,826,163 percent gain in the market price of the company’s shares in those 50 years. That’s an average annual gain of more than 21 percent!

The stock price (recently a bit below $300,000) is indeed too high for most investors — but that’s only for the Class A shares. In 1996, Buffett introduced Class B shares, valued at 1/30th of Class A shares, which were much more affordable for average investors. (They initially traded near $1,000 apiece.)

In 2010, when Class A shares were priced near $100,000 and Class B shares were around $3,000, Buffett split the B’s 50-for-1, bringing their price down to around $60. From there, they have grown to nearly $200, as of this writing.

Q

What are audited financial statements? — F.N., Sioux City, Iowa

A Publicly traded companies — ones you can invest in on the stock market — are required to report on their earnings and financial condition each quarter. They issue comprehensive “10-K” reports once a year, along with their annual report. In the intervening quarters, they issue less substantial “10-Q” reports.

Ten-K reports detail the company’s recent performance and discuss risks, among other things, and their financial statements are audited by accounting firms. Ten-Q reports, though, are not required to be audited.