Summary
Berkshire Hathaway recently announced that it is changing its buyback policy to give Warren Buffett and Charlie Munger more flexibility regarding buying back shares of the company.
There are three main reasons I think this is a positive development for shareholders.
Buffett's personal shares are being sold into the market, depressing the share value of long-time holders who may need to sell their shares in retirement.
The market is going through an extended period of irrationality, exacerbated by over zealous political emotions on both sides of the political spectrum.
Buffett needs to take into account how the appearance of medium-term underperformance might actually contribute to long-term underperformance.
Introduction
Berkshire Hathaway (BRK.A) (BRK.B) recently announced that it is amending its buyback plan in order to give Warren Buffett and Charlie Munger more flexibility regarding share buybacks. Previously, the plan allowed for share buybacks only if the stock was trading below 120% of the company's book value. This plan has commonly been referred to as 'The Buffett Put.'
