I don’t think it matters, not to speak of. Anyone who’s watching the markets with an eye to history knows that there is more downside risk in BRK stock, as there is with basically all stocks out there. If the market continues to tank, then BRK is very likely to trade down with it. Does this chart analysis add any more information? I don’t think so.
BRK is different than a lot of stocks, though, in that it started its decline from just moderately more richly valued than typical and is already solidly below typical valuations. And it’s widely known as a stable company and a good value pick, so if it drops more, it’s not going to stay down a long time unless something crazy happens to the business.
Watching/analyzing charts is interesting, but it’s not something that generally leads to actionable information that you can make money on, especially when it’s widely observed and commented on like the BRK head and shoulders. Buffett talks about how in his early years he got into every kind of stock analysis that existed, including chart analysis, but that he didn’t get any real traction until he adopted the Ben Graham school of value investing.
Buffett talks about how in his early years he got into every kind of stock analysis that existed, including chart analysis […]
His reasoning, that makes a lot of sense: “I realized technical analysis didn’t work when I turned the charts upside down and didn’t get a different answer.”