Will Traders Ruin Berkshire Hathaway?

Maria Shriver and Warren Buffett at Shriver’s 2008 Women’s ConferenceHopeTracker| Today is a Hallmark kind of day for American investors, as Warren Buffett’s Berkshire Hathaway Inc. company joins the Standard & Poor’s 500-stock index. Today’s Wall Street Journal estimates that as much as $14 billion may be traded today.

The most interesting dimension of this move, besides the symbolism of Bershire stock being available to more average investors, is the exposure of Berkshire stock to fast-moving traders.

Mr Buffett argues that the emphasis on short-term stock performance, with little interest in long-term strategies among traders — who exist to trade on a transaction basis — is a significant reason for America’s faltering place in the global economy.