Instead of buying into a mutual fund, would it be smart to just buy a share of Berkshire Hathaway?

Question

Instead of buying into a mutual fund, would it be smart to just buy a share of Berkshire Hathaway?

Answer 1

no it will not be fair

Answer 2

Without having more information about your personal information, such as age, current income and other data such as risk tolerance, martial status, and demographics it would be very inappropriate for me or any other person to provide specific investment information in this type of media

No, there's no real sound reason to that.

You will get more leverage, less risk, and more diversification buying a mutual fund rather than Berkshire.

Berkshire is a holding company, and is not suited for the average investor, the buy & hold mentality of it's management is not necessarily condusive to modern day investing and past performance is not an indication of future growth.

Answer 3

YES really a very smart idea. You basically are buying a type of mutual fund managed by the world'd greatest investor in the form of a stock. Its really hard to go wrong with Berkshire, except maybe if you wanna short it.....

Answer 4

Berkshire Hathaway is what's known as a holding company.  They own huge chunks of hundreds of companies.  This is almost all that Berkshire does (they also offer insurance).  They have a strong book of investments and typically grow at a great rate every single year.  The diversity of their holdings makes them similar to a diverse mutual fund, so in that regard it would make sense how you could want to purchase some BRK.A or BRK.B instead of buying into a mutual fund.

However there are a few things to consider.  First of all a mutual fund is a managed fund by top investors.  They generally have the flexibility to buy/sell shares of their stock whenever they want.  This is a little bit different from Berkshire.  Warren Buffett is a buy and hold investor and generally does not sell his holdings.  So things might not move as quickly (up or down) as a mutual fund.  This is not necessarily a bad thing, however.

You might also consider the annual fees that mutual funds will charge, and remember that fees are only charged with a stock at the time of purchase and when you sell it.  In this regard the Berkshire stock might actually be a better option.  It's really a matter of preference and risk tolerance.  There are highly risky funds out there which can pay much more in returns than Berkshire is likely to anytime soon.

That being said it would make sense to purchase a share or two of Berkshire and treat it as a "diversified" fund.  Based upon your preferences, this may very well be a smart thing to do.