The $532 billion investment firm has likely not found many deals to its liking. Berkshire targets companies that are undervalued by the market and expected to scale. RH seems to be the first “undervalued” firm it has found in quite some time.
Due to the relatively small size of the deal in comparison to Berkshire’s previous investments, David Kass, University of Maryland’s Robert H. Smith School of Business finance professor, told Bloomberg that executives other than Buffett and Charlie Munger most likely led the deal.
Maybe they saw a certain growth opportunity here that other analysts are missing. Much of their investment career is to try to find those rare under-priced opportunities where they expect to outperform the market.
However, that doesn’t mean it’s any less notable than if Buffett had pulled the trigger himself.
Value Investors Don’t Have to Sit Out the Dow Jones Rally
However, the RH deal – whether executed by Warren Buffett or his deputies – shows that while the stock market as a whole may be getting ahead of itself, that doesn’t mean value investors have to sit around and wait for the next crash.