73 Reds

Well, Prem Watsa acknowledged that Blackberry was a bad investment. Is an admittted bad investment better than any (every!) other alternative? Of course I've not always understood Buffett's reasoning either but there is always some inherent logic to what he does. The only rationale that makes sense to me here is that the company is trying to discourage new buyers in order to keep the stock price down for as long as possible in order to repurchase more cheap shares. If that is the intended goal, holding all remaining BB shares is a relatively cheap price to pay.

Yes, hiding a mistake is not appropriate but neither is perpetuating a mistake. I really do think this gives pause to prospective new investors.

Both, I suppose. Even if Blackberry shares can earn a >5% annual return is it truly a better idea than any return generated by the tax loss and reallocation of net sales proceeds? As a steward of capital, isn't that a more logical approach than holding shares in a company that you've called a terrible investment? Despite its value now being a mere blip on the radar, it is certainly talked about and thought about disproportionate to all the company's success. Anyone looking at the Fairfax portfolio and considering making an investment sees it for what it is.

I dunno; after quite the mea culpa one might assume that the resulting tax loss and even a 5% return on net sales proceeds, not to mention repurchasing FFX shares with the proceeds would generate a better result than continuing to hold equity in a company he no longer believes in. I think it it this kind of decision that holds some people back from investing in FFX.

Why do you think Fairfax continues to hold the remaining shares?

In the battle of age vs. velocity, age wins! But to be serious, given enough time, Berkshire will likely supplant a few of the names on that list. Those names look a lot like a list of dividend aristocrats. A long time ago I considered simply buying all dividend aristocrats and leaving them in a "coffee can" to grow. Probably not a bad strategy for someone with no interest whatsoever in investments or for others who chronically underachieve.

GEICO has never been price competitive for me and my family (no accidents, tickets or claims). As a BRK shareholder, that was never a concern because we live in a high-risk area. But recent GEICO results have been a head-scratcher for sure.

Well, you - or I found a fellow Compadre. Not that it started that way in my case, but it turned out that way almost by default. When you bang your head against a wall so may times and it always hurts, you try something different to avoid the pain. Just like for so many here, Buffett's and Munger's lessons resonated. BTW, been there/done that with enlarged prostate - common in men our age. Had a Turp some years ago and doc discovered cancer. Fortunately radiation treatment seemed to work - PSA has been in normal range for several years. Still go every 6 months for checkups and after 5 years only annually. Good luck with your upcoming surgery.

150 stocks - Wow! I have enough trouble keeping up with 5. As someone who has held my earliest shares since not long after you inherited yours, is there a particular reason why you've never sold any of those stocks? Surely they all could not have turned out to be great holdings(?)

Thanks for that! I don't view the issue as so much of a debate; rather its more a question of style and comfort level, as well as investing to one's strengths. To me, buying FFH a few years back well under book value was equivalent to buying single family homes at the height of the financial crisis. Whereas buying improved real estate for less than the cost of construction while getting the land for free was simply too good to pass up, buying FFH after Covid was at its core acquiring some fine assets well below cost with a steward at the helm who has grown book value at more than 18% per year since inception.

Indeed; its like being married and spotting a great looking woman - there is no harm in looking! But to your point, I'm always looking and FFH was in fact the most recent addition.

+1 There are some very talented stock pickers here; I'm not one of them. It takes too much time and effort. It is far easier to recognize powerful companies with enduring competitive advantages and superior management. Sitting on one's hands while owning shares in such companies is the best advice Munger could have given to most of us, who have neither the time, skills, and devotion necessary to trade our way to success.

The easiest stock to own for (thus far) eternity has been Berkshire. The issue is no longer whether I can personally outperform; rather the issue is how well I sleep at night. When you add in the benefit of deferred taxes, there really is no issue at all.

MSFT was pretty early on, late 80s. I'm a techno-idiot but fortunate enough to know some smart people in the industry, including my old college roommate who went on to do some amazing things like installing wall street trading floors for major brokerage houses even though we both nearly flunked Cobalt and Fortran (ugh!!) which was just starting to be taught in the universities. Those were so difficult that it didn't take much convincing that any company that would make using a computer easier for folks like me would be a hit. AAPL came along much later, post Steve Jobs. It was not until the ecosystem of AAPL became readily apparent that I started buying, but when Buffett also started buying it really clicked.

Mistakes? In my younger days far too many mistakes to even recall, LOL. Tried all sorts of techniques, market timing, options & derivatives, newsletters, etc... Then I met someone who had lived in Omaha and who had actually met Buffett, sometime in the late 1970s. Opened up a whole new way of thinking, which wasn't hard because I lost money as fast as making it every other way. The irony is, buying the first share of Berkshire was not easy - in those days brokers charged a 5% commission on odd lot trades and I couldn't afford to buy more than a share or two at a time so in the back of my mind was always the notion that the share price would have to go up by 5% just to get even. It took a while for such thoughts to fade. Today I mostly invest in real estate and add to existing stock positions when they look inexpensive. Fairfax is by far my most recent addition, bought initial shares for me, the wife and kids in early 2021 - thanks to Viking on this board, who I believe also posts his thoughts on SA where I first read his thoughts on the company. As an older person with a crusty mindset, a stock literally has to jump out as something begging to be owned before I will buy. If that same company is unsuccessfully targeted by the government for anti-trust violations, all the better.

Yeah, high share price was always the reason or excuse given but today one can easily buy fractional shares. The other issue is two classes of stock but some of us remember when there was only one class and they weren't so expensive. Not that Buffett would give a sh-t one way or another; in fact he probably prefers to be excluded for the same reason why Groucho Marx would never be a member of a club that would have him.

Is there an argument to be made that Fairfax won't get an invite due to the Watsa family control of the company? Similar to why Berkshire is not in the Dow 30?

Like many of you, it is hard to discern anything more about Berkshire's future than what Buffett has told us. But future management will (should) have to earn the deference now paid to Buffett by shareholders. It will be interesting to see how long the honeymoon period lasts.

No one would want to own a lousy business in perpetuity. Just like no one would care to own a rental property that is a money pit in a declining neighborhood with problem tenants. Imagine if every successful entrepreneur sold their business the first time someone came along with a heightened offer. IMO, value investing involves much more than an attempt to squeeze every penny out of an investment dollar. Is it possible to find a higher returning investment than those that you own? The answer, of course is always. But that is not the same question as whether it is wise to try to do so. Management plays such an important role in stock selection. How many public companies are out there where you trust management implicitly? My guess (and it is only a guess) is that most folks who owned stock in such companies in the past and sold those stocks for the purpose of reinvesting in something else ultimately regret their decision.

What about taxes? A good value investor understands the value of money lost. Just as some folks would not sell a valuable piece of rental property just because its value has risen, why sell a stock when the business continues to do well? As Buffett has often said, selling requires two decisions. It also requires more time and effort to learn and evaluate a new business. When you look at some of the great wealth that has been created, it often is the result of sticking with one or a few winners.

Thanks to all for your kind words. @dealraker, fear of failure has always been in the back of my mind - hence a conservative approach to investing. With stocks in particular, I'll only invest in highly dominant (near-monopolistic) companies with superior management, great balance sheets, and a history of successful capital allocation, innovation and profitability in most any economic cycle. Rarely will I venture into anything else. Starting in the early 1980s and for many years I owned only 2 stocks - BRK and MO. At the time both seemed to represent the perfect investment. IMO, one still does.

I only worked for others long enough to learn my craft(s). The retirement account was from the last 5-year period of employment 30 years ago. After that I needed non-tax deferred liquidity in order to build a business and invest with no restrictions. In hindsight it probably would have been better to set aside sums each year in tax deferred plans but a desire for unrestricted liquidity always trumped what looked like wealth that could only be enjoyed too far out into the future. I've always been a prolific saver and lived well below my means - another lesson learned at a younger age by observing others close to me who did otherwise. Initially I'd use only as much debt as needed to acquire real estate but then pay it off as quickly as possible. Young folks here probably don't remember or even realize that mortgage rates were often much higher than they are now. Once it became unnecessary to finance anything, I simply didn't. Ironically, as difficult as the period between 2009-2011 was for most folks, it was a boon for those with cash and no debt. Again, hindsight taught me I could have done much more even in those years but in truth, my lifestyle would not have changed regardless of how much more money could have been made. Inaugural post, after guiltily monitoring this board for quite some time. There are truly some amazing posters here who generously share their time and ideas. And of course, thanks to Sanjeev. As an almost pure Buffett disciple, my goal has always been to invest in stocks and other assets that can eventually be passed down to heirs. More than half of my net worth is in fully paid for real estate. Other investments include a highly concentrated stock portfolio. Largest holdings are BRK, AAPL, HD, MSFT and lately FRFHF. Outside of a small retirement account (less than 3% of net worth), no stock sales since the end of last century, when I liquidated a longstanding position in MO. The retirement account satisfies a recurring itch to "do something", though it has far under-performed other long-standing investments. Since youth I have no debt - buy everything including real estate for cash. (I watched debt ruin one too many people). Will gladly trade an extra few % of return for a good night's sleep. It took a good chunk of a lifetime to reach the point of not having to worry about money but the ride has been well worth it. Comments, suggestions or criticism is welcome - that's one reason why I am here.

Inaugural post, after guiltily monitoring this board for quite some time. There are truly some amazing posters here who generously share their time and ideas. And of course, thanks to Sanjeev. As an almost pure Buffett disciple, my goal has always been to invest in stocks and other assets that can eventually be passed down to heirs. More than half of my net worth is in fully paid for real estate. Other investments include a highly concentrated stock portfolio. Largest holdings are BRK, AAPL, HD, MSFT and lately FRFHF. Outside of a small retirement account (less than 3% of net worth), no stock sales since the end of last century, when I liquidated a longstanding position in MO. The retirement account satisfies a recurring itch to "do something", though it has far under-performed other long-standing investments. Since youth I have no debt - buy everything including real estate for cash. (I watched debt ruin one too many people). Will gladly trade an extra few % of return for a good night's sleep. It took a good chunk of a lifetime to reach the point of not having to worry about money but the ride has been well worth it. Comments, suggestions or criticism is welcome - that's one reason why I am here.