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Now BRK is split and B shares selling in the $70's is there any reason they will out perform the S&P by more than usual?
 

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Share price is set by supply and demand....BRK.B is a very well known stock.

It was not included on the S&P 500 before but now they are talking that it may be included. What does this mean? Well all those mutual funds and ETF's that buy the S&P 500 will have to include it in their portfolio.

More buyer = more demand = rising share price.
 

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I think they did the split so it could be added to the index.
They did the split so that they could buy Burlington Northern in a partial cash deal. As part of the deal, they need to give shares of Berkshire to Burlington shareholders, many of whom own less than the $3000 needed to receive one of the old BRK-B's.
 

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How does the split effect index inclusion?
(1) S&P has criteria on stock liquidity. By splitting the class B shares 50:1, they were able to satisfy S&P's criteria. (Prior to that, they did not satisfy said liquidity.)

(2) They bought Burlington Northern Sante Fe, and are effectively "replacing" it in the S&P.
 

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Now BRK is split and B shares selling in the $70's is there any reason they will out perform the S&P by more than usual?
Economic theory says "no". If you give me a $100 bill, and I give you two $50, it's a zero-sum exchange.

But that's theory. In practice, an increase in a stock's liquidity does have a short-term (positive) impact on a stock's price.

Berkshire is a rather special case; Buffett has always argued that the larger unit prices helped to reduce some of the volatility seen in other large companies' stock. So while I expect that there may be a short-term positive benefit for BRK holders, I wouldn't be surprised if the stock fluctuates downward more rapidly during economic declines as well.
 
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