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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch ✹✺🐝 SILVER
SHREWD
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Number: of 22351 
Subject: Re: WFC or BAC Preferred L (or other preferred shares=
Date: 09/29/26 11:36 AM
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No. of Recommendations: 8
That's what makes this attractive to me: a very high current cash yield, seniority to common, no maturity date, a voluntary conversion right, and an issuer conversion that can only occur after a very substantial rise in WFC.

Even if forced to convert some day in future, you can sort of "hedge" that situation a bit (admittedly not so much of a problem if buying today, since it's pretty near par). It can only happen if the common does REALLY well, so you can pair the preferred with a little chunk of common to soften the blow. Plus, of course, the value of the common is much more effectively inflation adjusted.

But don't overlook the other downside--it's not the inflation erosion of your coupons that is the biggest problem, it's the erosion of the capital if you ever ever want to sell. If you're sure just want the coupons forever, that's not a big issue.

Jim
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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