Discount arbitrage brokerage

January 22, 2010 9:13 PM

Cheapest way to buy a single share of of Bekshire B?

With the news that Berkshire Hathaway has split their B stock and is trading around 70 dollars a share, suddenly owning their stock seems possible. And GEICO I'm told offers a discount on insurance for Berkshire shareholders of ~8%, which would damn near pay for a single share in a single year. Which is great because a quote I got from them was substantially cheaper my current insurer.

The problem is, I don't have nearly the kind of cash on hand to buy a round lot of 100. I'd like to be able to own the share in my name rather than street name so they can verify I am a shareholder for the discount -- but I gather most brokerages charge for both transfer and odd lot size. Does anyone know a broker I can use to cheaply execute this trade and be a shareholder of record?

posted by pwnguin to work & money (10 answers total)

Well, you don't need to buy a round lot of 100 shares. That requirement has long since faded into the mists of time.

Though, it is generally not cost effective to buy fewer than 100 shares at a time you can still do so.

As to who is cheapest, I have no idea.
posted by dfriedman at 9:16 PM on January 22, 2010

I have heard that you can just tell GEICO you own the shares in street name, and they'll give you the discount. In that case you can just use any discount broker. Would be worth a try, anyway. Call them and ask.
posted by kindall at 9:23 PM on January 22, 2010

GEICO does give a discout to Berkshire shareholders.

As to the cheapest way, just buy what you can afford. Brokers don't care as long as they get their commission.
posted by zippy at 9:26 PM on January 22, 2010

Just sign up at Zecco.com or some other discount broker and buy as little as you want. The trade commission will be like five bucks.

I can tell you from personal experience, Geico doesn't verify. Just keep proof around incase they ever ask.
posted by floam at 3:41 AM on January 23, 2010

Also, in the same spot where you choose berkshire hathaway, there's a crapload of organizations there that also get you the same 8% discount. There's a good chance you already belong to something that'll save you the money. (You can't double-up.)
posted by floam at 3:45 AM on January 23, 2010

Definitely call Geico before you buy. I just checked, and my membership discount wasn't on the account. I asked them, and they added it, but said it didn't affect my rates because I am already in their "lowest rate class". I'd hate for you to be out $70 + commission and get no additional discount.
posted by mad bomber what bombs at midnight at 7:26 AM on January 23, 2010

Any discount broker will do. If you don't already have a brokerage account it's time to get one anyway. This stock is a fine way to get started. Buying a share out of every paycheck would be a great way to go.
posted by caddis at 10:41 AM on January 23, 2010

I have a Roth IRA which I recall is required to hold everything in their name. If I wanted street name I'd simply use that as it's pretty damn cheap to execute trades on.

mad bomber what bombs at midnight: "I'd hate for you to be out $70 + commission and get no additional discount."

The appeal here is that I would still own the stock so it's just a matter of knocking down the commission and fees. Commissions are easy to discover but other fees are much harder to get a good grasp on. It doesn't help that "transfer fees" mainly cover moving assets from one institution to another institution.
posted by pwnguin at 2:08 PM on January 23, 2010

Sharebuilder lets you automatically purchase shares, over time, for four dollars per transaction.
posted by thecolor12 at 8:38 AM on January 24, 2010

Well, I got a call from GEICO the other day and I took the chance to ask them about whether I needed to hold in street name or not and the rep said holding it in my IRA was fine. I wasn't penalized for the unusual trade size either, so I guess it's time to mark this one resolved.
posted by pwnguin at 1:32 PM on January 29, 2010 [1 favorite]