This Questionable Berkshire Hathaway Holding Actually Makes Sense

Investors are largely in agreement that most of Berkshire Hathaway's (NYSE: BRKA) (NYSE: BRKB) stock holdings are solid picks. Every now and then, though, one of its selections raises a few eyebrows.

That's what happened when Berkshire bought 3 million shares of department store chain Macy's (NYSE: M) in the first quarter of this year. Most people appreciate that the struggling company owns a real estate portfolio that may well be worth more than the organization's current market cap of just under $6 billion. To unlock that value, however, the company would need to take on the expensive -- and business-destructive -- headache of winding down at least some of its existing retailing operations, perhaps undermining the value of that real estate in the process.

But maybe Berkshire Hathaway isn't looking at what's since grown to a 7.4 million share/$162 million stake in Macy's as a real estate bet after all. It could be a legitimate turnaround play.

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