73 Reds

I always liked your State slogan. And your State, of course.

Yes, I largely agree with everything you write. In fairness, I only started buying just after Covid but have been steadily buying shares over the last few years. In fact when the MW report came out I literally used all the idle cash in various accounts to buy only Fairfax shares because the thesis sounded ridiculous, even to a round-numbers, "big picture" investor like me (my baseline for buying stocks - like you - is that I don't have to be precisely right about anything to still do well). The difference between now and 2020 seems to be that earnings to a great extent are more predictable and predictably good.

Viking, thanks again for your incredible depth of research. Has the company really changed so much or have they simply learned from their mistakes? A company doesn't grow BV at a CAGR of 18%+ for over 35 years by accident. I loosely followed the company all throughout the 2010s and have the same questions now as I did then about some of the more public investment mistakes but now we recognize that management took ownership of their mistakes and moved on. It was their "taking ownership" part that convinced me to invest; still looks like the same company to me, albeit that much larger.

Yes, I would not even try to come up with a specific present value for a company like Fairfax. My approach is to look at current earnings, BV, etc.. and then derive a base case scenario of "X", while at the same time being certain that there will be plenty of gravy on top of the base case because Fairfax can and does invest in, well, anything. If the stock can be purchased at a price less than "X", it is worth considering. The gravy is derived from trust in management.

Perhaps a better way to value Fairfax is by a slightly discounted historical BV growth rate of 18%/year to account for the future growth in market value of the company. I often hear and read that discounted future cash flows are the way to value a company but have yet to find anyone who can hit the broad side of a barn strictly using this approach. Buffett is as good as it gets and even he sometimes misses the mark. The beauty of a company like Fairfax (at least to me) is that future cash flows are wholly unknown because they have a lot to do with earnings of yet-to-be-had ideas and acquisitions. This is why management/culture has a lot to do with the value of an equity investment and Fairfax rates pretty high in that regard even though such "value" cannot be quantified.

Well, the business may prefer growth over shrinkage and there ain't too may PE 7, PB 1.1 other businesses available (?)

Viking, always enjoy your posts - thanks. To me the issue is a simple one, provided you are a long term investor with available capital. Market driven price volatility is always welcome. However, if price volatility is company-specific, the phrase "know what you own" is all that matters.

I seem to recall studies that show how a value added tax could completely replace the income tax at rates that might be widely acceptable. I don't think too many folks of any socioeconomic class (other than the very poor who pay no income tax) would argue that our tax system is fair. By the same token, few would argue that the government is in any way efficient at allocating our tax dollars. Would anyone here invest in a for-profit enterprise run by the government?

Why would we want to dissuade charitable giving? As it is most folks do not earn enough or give away enough to avail themselves to an income tax deduction for charitable gifts. if anything, we ought to pay much closer attention to what actually qualifies as a 501c3 organization and whether the endeavors are in fact in furtherance of the public good.

It is this type of discussion that helps makes a market. What looks cheap and/or acceptable to some may look expensive and not remotely worth owning to others. Both views can often be right at the same time. All depends on your investment objectives, skill-set, risk tolerance and time horizon. Also depends on where else you can invest outside of stocks and financial assets. Personally, stocks and bonds will never comprise a majority of my net worth.

Depends on how much the broad market loses. The larger the loss, the better the odds BRK closes higher

For someone like me who doesn't trade short term price swings, you're right, other than Fairfax, which remains cheap.

Best move this investor ever made was NOT rebalancing BRK.

Yeah, rebalancing individual equities seems like a concept for those who don't know what they own. Buffett would be the last such person. My guess is he needs the money for something better but KO has seen its best days and AAPL probably has new business ideas that are yet unknown. Eventually he'll explain it.

I'm of a different ilk. If you believe this is a "better" than wonderful company, why pay taxes and then have to find an even better than "better wonderful company" in which to invest?

The irony is he sold "an even better business" and kept a mere "wonderful" business. Certainly valuation is a (the) reason but one has to wonder whether he would buy shares of KO today over AAPL.

Buffett's annual letters. They are not investing books per se, but I started reading them in the early 1980s knowing little to nothing about investing and the rest is history.

That would put every barber shop in the country out of business.

My daughter's alma mater now has a mandatory course in DEI. Mind you, tuition is $65k/year. I'd refuse to pay for those so-called credits.

But even you would acknowledge that you and your frat brothers are, as a group, exceptional. I'm not arguing that college education is a waste; in fact you can probably get a decent education almost anywhere if you stick with useful curriculum that can help you succeed in life. From my vantage point, colleges and universities offer all too many "degrees" and pathways that tend to lead nowhere without proper values or guidance.

There is value to the college experience if, going in, kids understand that they are there to learn a skillset or prepare for whatever further education is necessary to ultimately make a living. I gave my kids the option of going anywhere they wanted with that understanding in mind. They chose expensive private schools but to their credit they worked all through school and used their work experience to go on to successful careers. Funny you mention accounting; I hated accounting in college (nearly flunked) and didn't realize until later on how important fundamental accounting is to investing. I insisted that my kids take at least one accounting class and they did better than their dad.

Wait till your kids get into college. You may have to deprogram them after they complete their coursework. My kids would sit in class and just shake their heads at some of the nonsense being thrown at them. I seriously question the value of a liberal arts degree today and would like to think that if it were me, I'd opt for trade school.

Of course - almost anything can be deemed a mistake of sorts in hindsight because through that lens there is always some better way.

Nope. But what ought to be a more common refrain these days, we can agree to disagree.

You can characterize Warren and Charlie in a lot of ways, but "lack of effort" is not one of them. Even inactivity requires a conscious decision.