Masterofnone
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Posts posted by Masterofnone
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Meaningless conjecture- The price action the last two days has the feel of shorts covering on the bid and short-term traders taking their 10% on the ask.
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Isn't it wonderful that they reported great results! Getting rich fast is terrific but pretty fast works too. The stock is 6% off all time highs with shorts still working on it. Relax and wait a few months...
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1 hour ago, ValueMaven said:
OTC just hit over $1000 and is up close to 15% from the MW bottom
Wouldnt surprise me if we get some buyback news here Thursday night. Again - very stupid stock to short. Only 25M shares o/s and the float is very tight!!!
In the interest of hyperbole, 1000/907 is 10.25%, but your point stands.
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1 hour ago, backtothebeach said:
+1
Pretty much what I figured out about 5 years ago. Only two steps, with an optional third:
1. Buy Berkshire and/or other reliable compounders when they are relatively cheap.
2. (optional) when they are really really cheap add a little leverage, take off leverage when they seem slightly expensive
3. Do nothing
Questions to figure out: Which companies are compounders? Which are reliable? What yardstick to use for "cheap". Not too hard for Berkshire. Or even the S+P500 if you happen to catch it in a bear market.
Sadly that is boring AF, so I have not been able to stick to only these. Getting better at it though.
+1
I started in this game in my late thirties. My actions were ill informed and results reflected this. Things worked out when finding Berkshire. It was my "best idea" and really only idea based on deep understanding. In the subsequent 30+ years the bulk of my investing was adding when it was cheap and never selling, resulting in returns a couple of percentage points better than the underlying stock. But during this time, Berkshire was a unique company- total downside protection with Buffett at the helm. (I wish I could say that my other ideas kept me out of bars...) I have done much better over the years buying good companies when they were too cheap than "betting" on stories. The allure of quick riches can incinerate capital that otherwise could have slowly and surely led to riches.
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These companies only work in a few scenarios. A very few of them actually do have shareholder friendly management and dividend out excess cash.
Otherwise, there has to be a catalyst such as a potential uplisting or sale. I've had both of these work once, and each time it took longer than anticipated.
Those really successful in this space have the resources and energy to become significant % owners of a company and force management to unlock value.
This route works in cases of lazy or incompetent management but not if they are crooks. Very tough space but some do it well as full-time managers with the willingness to barge in and make changes.
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Well this is the COBF board...
Whittled my BRK position down to 64% (been buying the dips for 25 years and it has served me well.)
Fairfax 13%
Moving 4% to an outside manager next week
2-3%
PCYO, PX, CLWY, JOE, WFC
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Just thinking that the created demand of 6 days worth of volume plus likely run-up in anticipation of this demand could possibly create that favorable valuation.
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Should Fairfax get included in the index does anyone think they might use this as an opportunity to exit a portion of the TRS? There's a big wad of shares owned by the counter party.
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Not to continue to flog this discussion, but the point of owning Berkshire is risk adjusted return.
Sure there are ways to make money faster. If someone insists I steer them into a stock my only response is Berkshire- moral hazard and all... There have been so few downdrafts in recent stock market history that folks tend to discount the value of safety and the potential of benefiting from "bad" times. BRK's portfolio is not optimized for total return but for risk adjusted return.
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Umm. "Absolutely no idea"?
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19 minutes ago, gfp said:
Who ever knows but my guess would be that the major indices are being pulled higher on short covering capitulation as the S&P500 threatens to make a new high for the year and Berkshire isn't really a stock that gets a lot of short sellers.
I doubt the Haslam stuff or a potential OXY financing deal has much to do with it.
gfp seems correct again. (He usually is.) The companies I own which have had significant short interest have all risen substantially this week.
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Yup. Since I don't know where the indices and ETFs will go I split purchases like this in thirds. (If I did, I'd be set trading the indices....) I'll be back in full if it overshoots to 303. Good time to play this game I think.
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Repurchased a portion of BRKB sold above 370. "Trading around a core". Or just to keep me amused.
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8 minutes ago, Libs said:
The volume decreases were primarily due to lower intermodal shipments resulting from lower west coast imports, the loss of an intermodal customer and competition from lower spot rates in the trucking market which has impacted our domestic intermodal demand>
is a factor:
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4 hours ago, Gmthebeau said:
I have seen reports that many recent homebuyers are expecting rates to fall and they "will just refinance". I agree a lot of people are betting on a return to low rates. This seems like a very risky bet to me. I think it is more likely we see the treasury yield curve shift up on the long end when people finally realize the FED is serious about getting back to 2% inflation and it will take much longer than the market expects. Mortgage rates may very well go higher not lower.
Well in a (useless) sample size of one, my son and his wife just bought a house. Because they need one and are tired of pissing away potential equity in rent payments. They bought a house they can afford and if rates go down, will naturally refinance if it seems prudent. Anyone with a mortgage will HOPE rates will fall so that refinancing helps them financially. That is different than EXPECTS.
Reports..... agendas....?
Those expectations could be the case, though but at least in my son's experience the banks didn't seem caviler with their underwriting requirements- quite the opposite.
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12 times average trading volume on FRFHF today. Some institution cashing out while another sees opportunity in the future. Does Fairfax buy back OTC shares or do they only purchase on TSX?
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43 minutes ago, Jaygo said:
Yes there is good value but to be fair. The equities have tax considerations and much of that cash is now generating a portion of the stated earnings.
(As stated- wildly simplified) Yes cash is contributing to earnings but no credit for "look through" or equity appreciation which over time is likely greater.
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Berkshire is still cheap. Wildly simplified, take Q1 operating earnings as the run rate for the year, back out cash and equities and the PE is under 12. They have some pretty good companies under the umbrella.
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Andrew Bary does a good job covering Berkshire. He understands all the moving parts:
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2 hours ago, SharperDingaan said:
Easy to get it in, hard to get out. Until there is a 'liquidity event' to sell into (who knows when), you are relying on dividends and interim sales of stock. You are not going to be swing trading, there will not be an options market to sell into, and you need all the interim shares you intend to sell - on day 1. You are liquidating over time.
Bingo.
A dividend is your friend here- regular or special. Selling into these markets only works when something good happens, and in those cases it can be really hard to part ways. Conversely, when someone with a large position decides to liquidate, some good buying opportunities can arise. There can be weeks of slightly elevated volume and downward price pressure. Not a bad idea with microcaps to look at trend and volume before acting on assembling a position of size.
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Dave Waters runs Alluvial Capital- this is his bread and butter. He is generous with his ideas:
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For us older folks who have studiously delayed gratification for a lifetime, it can be difficult to realize that later eventually becomes now. Reminds me of when my boys were about 6 and 8 and we shut down their request to spend their life savings on something we didn't deem appropriate. The 6 year old muttered to his older brother: "Whats the use of having all this money if they won't let us spend it?" (We caved as we didn't want to lose our workforce.) I have to whisper those words to myself now and again. It's fun to be able to be generous- to servers, the community and ourselves.
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That PEP chart may not actually beat the S&P over the time frame. (Close either way.) But Pepsico has payed a reasonable dividend for the entire duration, and the reinvestment of those dividends (even with the tax drag) creates the out-performance.
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Spooky-The only one I have ever recommended to anybody who has asked is Berkshire. There is nothing close when it comes to risk/reward, even with the certainty that WEB will eventually not be running it. At that point, there will be a 5% dividend and a superior group of businesses, the vast majority of which have the attributes that you are seeking.
Why did so many smart investors miss making a killing on BRK stock?
in Berkshire Hathaway
Posted
In the last 25 years nobody "made a killing" buying Berkshire. But by repeatedly buying when it was cheap it provided a wonderful risk-adjusted return. The down side was always covered, certainly to the detriment of total returns, but that is the price paid for safety. And the surprises will mostly be pleasant ones, likely even when the old fellow dies or passes the reins.