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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" 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 🐝🐝🐝 GOLD
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Number: of 21937 
Subject: Re: A vs B
Date: 07/26/24 10:15 PM
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I don't think you can use ANY figures to properly measure it. That's because the As don't trade nearly as much as the Bs, and the As have a rather wide bid/ask during the time that they aren't trading.

The standard method for determining a price is simply to take the midpoint of the (best) bid and (best) ask across all trading venues. That's what brokers are required to do for mark-to-market at day's end (NBBO), and it makes a lot of sense. The gap may be bigger or smaller for various securities, but the best way to think of it is that the midpoint is the "real" market price, and the gap to either side is just the current cost of trading it. Looking at the ratio using the bid of one and the midpoint (or ask, or bid) of the other isn't really meaningful.

For Berkshire, the only time the A:B ratio using midpoints jumps around much during the day is when somebody is in the middle of trying to trade an A share and the bid (or ask) for the A shares is moving towards or past the prior midpoint...until the trade completes. Then the mid/mid ratio generally returns to the current norm.

Whether the last trade was an A or a B, or whether there are options or not, isn't really important. The most meaningful current "price", for whatever it's worth, is set by the bid and ask.

Jim
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This community has written 21,448 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 · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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