Q. What do you think about investing in a share or two of Berkshire Hathaway Inc. Class B? It is expensive, but Warren Buffett seems to be a genius. - FP, via the Internet

A. Although the diversified holding company's Class B shares, trading at around $4,500 apiece, are admittedly less expensive than Class A shares at more than $135,000, that's still no pittance.

Since Berkshire Hathaway Class B shares have been relatively flat this year after robust gains of 29 percent last year and 25 percent in 2006, however, you could conceivably view this as a buying opportunity.

Best known for savvy chairman and chief executive Mr. Buffett and its Geico insurance unit's gecko, the firm owns and operates more than 70 businesses and invests in undervalued stocks and bonds. It is a significant shareholder in companies such as Coca-Cola, Moody's and American Express.

Fourth-quarter earnings were down 18 percent on lower investment gains and a drop in insurance underwriting. Buffett has warned that the insurance business is likely to become tougher this year.

Berkshire has little holding company debt, a solid cash position and excellent financial health.

Mr. Buffett has been investing aggressively to take advantage of the current distressed market.

He has started a bond insurance company called Berkshire Hathaway Assurance, backed by Berkshire capital.

Berkshire has increased holdings of Kraft Foods Inc., US Bancorp, Burlington Northern Santa Fe Corp., Carmax Inc., Wells Fargo & Co. and Johnson & Johnson. It has initiated holdings in GlaxoSmithKline plc.

It is paying $4.5 billion for 60 percent of Marmon Holdings Inc., a diversified private firm owned by trusts of the Pritzker family, which developed the Hyatt hotels. It is also spending $2.1 billion to buy utility TXU junk bonds.

Its General Re Corp. unit is the world's only AAA-rated reinsurer. Berkshire also recently bought a three percent stake in Swiss Reinsurance Co. Reinsurance permits insurers to insure risk they have assumed for their customers.

On the negative side, four former General Re executives recently were convicted on charges stemming from allegations of fraudulent transactions that inflated reserves of its largest client, American International Group Inc.

Berkshire shares receive a consensus "hold" rating from analysts, according to Thomson Financial, consisting of one "strong buy" and three "holds."

Though shareholders would love to know the 77-year-old Mr. Buffett's succession plans, he has not announced them. Often mentioned as candidates for the firm's position of CEO in charge of operations are top Berkshire insurance executives Tony Nicely, Ajit Jain and Louis Simpson.

Mr. Buffett has launched a separate search for a chief investment officer, saying he has narrowed the hunt to four candidates who are "young to middle-aged, well-to-do to rich".

Q. What exactly is a one-time dividend? Why are they issued and what do they signify? - EB, via the Internet

A. The biggest special one-time dividend was Microsoft's $3 a share dividend worth $32 billion in 2004.

Chairman Bill Gates received $3.3 billion from it, which he pledged to the Bill and Melinda Gates Foundation.

A special one-time dividend is a distribution of company assets, usually in cash, to shareholders. According to Standard & Poor's, there were 628 of these in 2007.

There was talk that a greater number of giant companies might join in the practice after Microsoft took the plunge, but that has not really happened. Most companies simply pay their regular dividend on a quarterly basis, though some do it semiannually or annually.

"Companies might make an additional, one-time dividend payment in the event of a special situation," said Howard Silverblatt, senior analyst with Standard & Poor's Corp. in New York.

"This is usually when they have excess cash, perhaps from selling a division."

In Microsoft's case, the special one-time dividend was issued simply because it had a lot of extra cash.

It was an effort to appease shareholders who were unhappy about the disappointing performance of the firm's shares.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, PO Box 874702, Tempe, Arizona 85287-4702, or by e-mail at andrewinv@aol.com

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