Buffett's Deere (DE) Bet is Still Solid, Even Amid Q4 Miss

November 21, 2012 7:37 AM EST Send to a Friend
Some speculation has been made whether Warren Buffett might be crying into his bowl of Sugar Smacks this morning following Deere's (NYSE: DE) quarterly miss, as reported earlier.

The answer, of course, is no. Buffett doesn't cry; doing so is neither profitable nor a good value.

Other than that, let's do a quick recap. Buffett's Berkshire (NYSE: BRK-A)(NYSE: BRK-B) disclosed a new stake in Deere, established sometime in the third quarter. Well, let's say Buffett waited until after Deere's third-quarter report in August, when shares dropped to $75.50 or so. With Deere at $85.99 as of Tuesday's close, Buffett is up 13.9 percent.

If Buffett got in before the report, Deere maxed out at $79.95 or so in mid-August, for appreciation of only 7.6 percent.

So, if Deere drops off 4 percent to 6 percent over the next couple of days following the report, that puts shares somewhere in the $81 to $82 range, making Buffett's bet still a good one.

He is the Oracle, after all.


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