Luca

Disadvantage: It’s not just scale that places the United States at a comparative disadvantage in infrastructure construction. China is better at building, not just domestically but across the globe. Chinese firms dominate the competitive procurement of leading infrastructure lenders such as the World Bank. They won $2.3 billion worth of World Bank–financed infrastructure contracts outside China in 2020, compared to the United States’ $27 million worth of contracts. Of the 20 largest construction contractors, 14 are in China, six are in Europe, and none are in the United States. China owes its dominance partly to government subsidies, but on balance, that’s a good deal for developing countries who are effectively receiving handouts from Chinese taxpayers. U.S. policymakers may claim that Chinese subsidies are unfair, but those complaints will fall on deaf ears in the countries that benefit from China’s largess. Anxiety: But the gravest flaw of B3W is that it appears to be based on the very model of self-dealing capitalism for which the U.S. government has condemned China. The main components of the Biden administration’s strategy for competing economically with China involve subsidies to American companies. USAID spends most of its resources buying goods and services from U.S. firms. The Bipartisan Innovation Act would also provide billions in industry subsidies to ramp up U.S. semiconductor production. Worse, the U.S. response is being copied by its ally the United Kingdom. British Prime Minister Boris Johnson is redirecting aid spending toward programs that use “world-class British expertise,” as the British Foreign Office generously described the approach as part of its aid strategy this past May. Perhaps other G-7 members will follow in their wake: certainly the European Union is looking for ways to disburse billions in subsidies to European firms planning to invest in developing countries. https://www.foreignaffairs.com/articles/united-states/2022-06-22/america-shouldnt-copy-chinas-belt-and-road-initiative?check_logged_in=1&utm_medium=promo_email&utm_source=lo_flows&utm_campaign=registered_user_welcome&utm_term=email_1&utm_content=20230707

+1 We can only see what happens, I think he will run the country just fine, long term. How likely do you think is this scenario, a full-blown military war between the West and China? That would be another World War but with economic consequences of epic proportions. Which stock won't go down if the rockets start flying into the cities, It's also not like Ukraine Russia, they have nuclear weapons...it doesnt make any sense for either the US or China to fight with the military. China is a huge threat because their economy is and will be much more competitive than any other, they are hard working people, they are at the forefront of science: https://www.science.org/content/article/china-rises-first-place-most-cited-papers, they have their manufacturing in the country and didn't outsource it to some foreign country like the US. Its obvious why they get so much hate, they are a threat for all the business owners in the west who benefitted from cheap asian labor while resting on little competition. That changed and will change harder.

@cubsfan Why would China unleash a Virus into their own country, killing 100k chinese people, seriously harming their economy, risking huge protests against the government. It doesnt make any sense it all, yeah maybe it was a lab error but that this was a Intelligence Operation to harm the "world" is unsubstantiated and a crazy claim. Although the US likes to throw these words around to make other people afraid of china, worked pretty well in their favour.

You know its funny, so many people talk doom and gloom about China, what a shitshow their system is, everybody leaving etc whatever, but on the same time we have massive propaganda against Chinas industrial power, military power etc, concerning this, concerning that. I thought china is so weak? Its obvious that china is not weak at all and are on their way to gain as much and more control than the US had the last 100 years.

So the account itself is free, at least thats what i am able to find but you say for realtimequotes you gotta pay up? I guess for someone who doesnt trade derivatives and makes not too many trades the 125 dollars can be disregarded.

Sold half of my remaining TSMC position, added proceeds to FFH. Now 30% of the portfolio.

Thanks a lot for answering, yeah there are some frictional costs but if you are still having a long investing runway and dont need the money for anything else, holding makes sense with a decent Net worth. I will post more later at home, cheers!

I know we have quite some investors here from Germany, since Germany is not ideal for investing, tax wise, one option is to create a holding that reduces the taxes paid: Essentially reducing the capital gains tax from 26.38% to 1,465% and taxes on dividends from 26.38% to 15.82%. If one swings in and out from positions (like we had with meta), this holding would open up quite a lot of opportunities due to having more capital available due to less taxes paid today. When closing the holding and transferring the equity to one's private wealth, that would then create a tax event, essentially enabling one to defer taxes. It's also possible to pay one's own salary through the holding, so some options of getting cash out without paying too many taxes is there. Anybody here in Germany and ever did this? Annual costs to run this shouldn't be too much, costs can be kept low between 500-2000 € annually as far as I understood.

I think @Viking provided tremendous work on FFH in the Fairfax thread. We also discussed Intrinsic Value in a specific threat there quite recently. Just use the search option

Sold some BRK and Nintendo for FFH

Yeah true, lots of juice left to be squeezed!

The 1.5% fee on deployed capital is annoying to calculate precisely but i guess one can say it eats away 1.5% a year. Then the 20% performance fee eating away 2% of the returns on top. 15% Book value CAGR leading us to something around 11.5% returns? Thats how i understood it more or less.

Have to edit

Noam Chomsky recently stated a nice comment in an interview on this whole war with Russia: "The hypocrisy of the west is astonishing"

I just worry that at a 700b Marketcap, outperforming will get harder and harder for BRK.

Could you share how you calculate the 4.2%. I agree that from 20% CAGR to 12.6% seems very wrong. Writeup is from VIC, the 2017 one i believe.

How do they calculate this 7.4% fee going to Watsa? Seems way too much considering 1.5% fees on equity and 20% performance?

https://www.bloomberg.com/news/articles/2023-07-03/china-to-restrict-exports-of-metals-critical-to-chip-production China imposed restrictions on exporting two metals that are crucial to parts of the semiconductor, telecommunications and electric-vehicle industries in an escalation of the country’s tit-for-tat trade war on technology with the US and Europe.

Recently, we discussed Apples current Valuation and the possible 10 year forward IRR. Since Apple uses the majority of its cash to buy back their own shares instead of giving shareholders the cash via dividends, its an important factor for the returns to be made. Buybacks depend on> 1 Volume, shares able to be bought in the open market 2 Purchase price at depressed valuation or exuberant valuation Since it is difficult to model possible depressed valuations, well known Mr.Bloomstran includes multiple valuations with buybacks at certain level of book value, the lower the price to be purchased the higher the return. Considering a rather illiquid stock with less volume, how do you model buybacks? The new increase in buyers will shoot the stock upwards, buybacks are less effective. The obvious decision then would be to pay dividends,given no other capital allocation options inside the business. Just wondering how the board thinks about modelling them over longer periods. Pabrai once posted this nice graph> How hard does it get at these specific checkpoints? What if the shareholder base left doesnt sell enough? Cheers!

https://www.bloomberg.com/news/articles/2023-06-29/chinese-chipmaker-asks-suppliers-to-buy-back-banned-gear “Machine suppliers should buy back the equipment and components we have purchased legally if we can’t use them,” Yangtze Memory chairman and acting Chief Executive Officer Chen Nanxiang said in a defiant speech at an industry event in Shanghai on Thursday. Tough times ahead!

Who can blame the chinese government for trying to regulate this space. In many ways similar regulations will come in europe for multinationals and its only a good thing. Blaming the CCP for regulating this sector and that that is the reason young people do not have jobs is too simple.

I use the free Microsoft Drive where i store few important documents like contracts etc. Rest is saved on multiple hard drives and physically. I refuse to pay for Cloud Storage when i can also set up my own storage server for cheaper.

Joining you as well. Reduced my Berkshire Position and shifted proceeds into FFH and FIH

+1!!!

Huang also worried that Chinese companies, unable to access US products, would start to build their own chips to rival Nvidia's market-leading chips. "If we are deprived of the Chinese market, we don't have a contingency for that," the Nvidia CEO told FT. Most important of all, according to Huang, blocking the US tech industry's access to China would undermine the Chips Act. If losing the Chinese market, the US tech industry would require one-third less capacity, Huang pointed out. "No one is going to need American fabs, we will be swimming in fabs." https://www.digitimes.com/news/a20230628VL203/us-china-chip-ban-ai-chips-nvidia.html This is getting very tense and interesting.