Intelligent_Investor

I love Warren as much as anyone, but Charlie was the guy that I really connected with and modeled my investing after. Rest in peace Charlie, your legacy will live on in the thousands of value investors you inspired

I think they should do away with special treatment of LT cap gains for people with a net worth over a certain threshold.

Starting to liquidate mine and rolling into short term treasuries

GGLL and AMZU. Went long 1.5x etfs on GOOGL and AMZN when they were trading in the 80s and low 90s, taking profit now on the leveraged positions, but not selling actual GOOGL and AMZN shares

I like using a reverse DCF to sanity check my assumptions.

That's because Chinese index funds for a long time were very heavy on shitty, low margin, commoditized industrial businesses or cyclicals that aren't conducive to buy and hold. If you invested in consumer/tech you would've made a lot of money over the past several decades. Buffett and Munger have both made a killing in China picking individual stocks, and I think that's the way to go with China, although the indices are probably cheap enough now that forward returns are decent.

Pentagon saying they don't believe the plane was shot down...looks like initial reports of a missile may be inaccurate/misinformation

20 year GSEs at 6%, but at that holding period I would want equity like returns.

The major catalyst is western economies slowing, thus slowing their exports and causing prices at the factories to fall (oversupply of stuff that isn't being bought by the west due to economic issues). China's consumer spending isn't that bad, but exports are falling as the US and other western countries grapple with economic strain. China will likely not be a purely consumption based economy anytime soon, because culturally the Chinese are savers/hoarders, and have been for thousands of years. This is also why western style economic stimulus doesn't work as well in China vs the US. In the US where the average American spends most of his money, direct stimulus actually flows into the economy, in China it flows into bank savings/real estate investments/housing, not the general economy and thus has much less impact.

Assuming that we are the only intelligent life out there is arrogant because you are assuming we are the ultimate outlier: there are over 200 billion stars in the Milky Way and there are over 200 billion galaxies in the known universe. That is 40 sextillion stars, if the possibility of life is even one in one trillion, then there are still over 40 billion star systems out there with life. The scale of the universe is so large that the probability of life would need to be so miniscule that we would have needed to overcome a greater than 1 in 40 sextillion chance for us to be the only life ever. If assuming we or our planet is special enough to overcome those odds isn't arrogant, then I don't know what is

I think 2 things can both be true: we are not the only intelligent beings in the universe (I think it would be extremely arrogant to assume we are the only intelligent species in all of time and space), and that even if 1) is true, we have never been visited by them and the "UFO" sightings are other phenomenon

Yeah the illiquidity would be a problem. I don't think Berkshire minds being most of the volume if there is high liquidity. IIRC Charlie stated that when they were buying Coke, they bought almost all the daily volume for months.

As they say: "The fastest way to become a millionaire is to be a billionaire and invest in NFTs"

Its because FFH is too damn small for Berkshire. A 10% stake in FFH is less than $2B, even if FFH doubles, that barely even moves the needle given Berkshire's current size

The other thing to take into account is that for many top companies that have a large net cash position where that net cash position is growing, P/E is misleading because it is generally overstated relative to EV/FCF simply due to the fact that the large net cash position inflates market cap. So you might see one of these companies with a P/E of 35 but an EV/FCF of 22.

I think some of the great Chinese companies have a chance plus there's a margin of safety due to the geopolitical uncertainties right now. The top American companies are trading at a premium so not exactly a margin of safety. Tencent I feel is probably the best bet for a relatively longer term compounder with an almost impenetrable moat.

A lot of it is simply the math of compounding. If a company is able to compound equity at 20% a year for decades, its damn near impossible to overpay for it based on near term multiples. 35x earnings on a company that compounds at high double digits for several decades is not expensive, if the moat doesn't collapse.

The issue is that there is a Washington pun right now, which is much more powerful than any Fed put. If we get into a recession Washington will just print another couple of trillion dollars to get us out of it. Congress hasn't shown any willingness to temper spending and their solution to every crisis seems to be just print their way out. This implies 3 things: 1) Long term monetary devaluation 2) Higher required return on gov't debt 3) Consumer spending and thus corporate earnings will likely have a floor making equities more attractive. We are very much TINA right now

As Munger has said before the best time to sell is when your thesis has changed/no longer is likely to be true. For a net-net that will likely be in a few years, but for a compounder like Coke that might be decades.

4 handle on the 30 year

Buying more SIG, probably gonna start stretching maturities on bonds sooner.

Treasury yields are popping, 30 year bond now at a 4 handle, this could be very good for FFH

They won't, AAPL FCF growth is like 6-7%, at a 3% FCF yield you are still looking at high single digit % return for AAPL

The striking down of the student loan forgiveness should help somewhat with inflation. Less money in people's pockets = less spending

We're in a weird state right now where the fed is trying to fight against the fiscal policy excesses from Washington during the 2020-2021 period as well as the impacts of the Ukraine war while simultaneously trying to avoid killing the middle class. But so much of the stuff that is going on in regards to inflation is out of control of monetary policy - you can't get out of a war or housing supply issues by raising rates, but that's what they are up against now. When rents/home prices have basically gone up and to the right at a double digit % annually clip for 3 straight years with no end in sight due to massive supply shortages, its not surprising that core inflation is still holding up despite heavy rate increases. I just don't see a way the fed can hike its way out of the housing issue without it naturally resolving itself.