Roger Lowenstein’s work has been discussed in some detail on The Rational Walk over the past few months. Lowenstein is the author of Buffett: The Making of an American Capitalist which was reviewed last month. More recently, he wrote While America Aged which covers several case studies related to the pension crisis in the United States (this book was reviewed in February). Given Lowenstein’s background, I was interested to read his review this morning in The Washington Post of an upcoming book by Justin Fox covering the unavoidable implications recent history has on various theories of “market efficiency”. Read this article for further details.
I have been reading the updated sixth edition of Security Analysis from cover to cover and on more than one occasion, I have stopped to consider the major advantages modern day investors have compared to Graham andDodd . Investors today have access to a wealth of information that Benjamin Graham lacked during his career. However, more widespread information also would theoretically lead to more market efficiency and reduce opportunities to findmispriced securities. Is it true that the market is more efficient due to the widespread dissemination of information made possible by the Internet and other technologies that have emerged in recent years?
Over the past month, I wrote a few posts regarding potential arbitrage opportunities available due to discrepancies between the relative valuations of Berkshire Hathaway’s Class A and Class B shares. The arbitrage opportunity identified in these posts has now been entirely eliminated as a more “normal” relationship between the Class A and Class B shares returned. Read this post to revisit what took place over the past month and the implications for the notion that the market for Berkshire Hathaway shares is “efficient”.