UK

As I understand he thinks that negotiations between Russia an Ukraine at that initial stage of the conflict could have been successful and they were close to some workable agreement, but Ukraine was encouraged to walk away from it. And today chances of something similar is very low. No trust etc. Not that there is something very new in what he said and I did not listened to the whole interview yet, but find his philosophy (offensive realism?) and worldview quite interesting. Not that I agree with him on everything:), but I think he says a lot of things that makes sense, kind of how everything works etc. Also on US vs China and other issues.

https://www.reuters.com/technology/sam-altmans-ouster-openai-was-precipitated-by-letter-board-about-ai-breakthrough-2023-11-22/ Some at OpenAI believe Q* (pronounced Q-Star) could be a breakthrough in the startup's search for what's known as artificial general intelligence (AGI), one of the people told Reuters. OpenAI defines AGI as autonomous systems that surpass humans in most economically valuable tasks. Given vast computing resources, the new model was able to solve certain mathematical problems, the person said on condition of anonymity because the individual was not authorized to speak on behalf of the company. Though only performing math on the level of grade-school students, acing such tests made researchers very optimistic about Q*’s future success, the source said.

Black enough for me:

I agree with this, more so, if PBV would become more than some 1.2. Also, despite most of us see this decision by them as very smart (which it was) there is some strange alternative perceptions between some market participants, e.g. one big and serious money manager called Prem 'a bit of a cowboy', also because of these TRS. Not sure I would agree:), but maybe understandable to a degree (just because OMG derivatives), because even Buffett was criticized for his index puts?

But except for not reaching for the yield, when interest rates were very low (and I think we all agree this was genius and do not call it macro thinking, but more like sound investing thinking?) is there any evidence of FFH relying on too much macro thinking in the last 5 years and not actually going to the opposite direction? Like not even talking or writing much about it anymore? I will repeat myself, but it feels to me, that the biggest risk for FFH future success is actually outside of managements control and it is possibility of zero interest rates for an extended period again in the future. This might not be necessarily lethal for them, but with majority of float in the fixed income, perhaps it would be hard to avoid or mitigate this somehow completely, leading to an under earning and lower float value to a some degree again, like we have seen already. This would be is my biggest worry with FFH, especially when/if they will be better priced by the market (still not today at 1 BV).

https://stratechery.com/2023/openais-misalignment-and-microsofts-gain/ What is clear is that Altman and Microsoft are in the driver seat of AI. Microsoft has the IP and will soon have the team to combine with its cash and infrastructure, while shedding coordination problems inherent in their partnership with OpenAI previously (and, of course, they are still partners with OpenAI!). I’ve also argued for a while that it made more sense for external companies to build on Azure’s API rather than OpenAI’s; Microsoft is a development platform by nature, whereas OpenAI is fun and exciting but likely to clone your functionality or deprecate old APIs. Now the choice is even more obvious. And, from the Microsoft side, this removes a major reason for enterprise customers, already accustomed to evaluating long-term risks, to avoid Azure because of the OpenAI dependency; Microsoft now owns the full stack. Google, meanwhile, might need to make some significant changes; the company’s latest model, Gemini, has been delayed, and its Cloud business has been slowing as spending shifts to AI, the exact opposite outcome the company had hoped for. How long will the company’s founders and shareholders tolerate the perception that the company is moving too slow, particularly in comparison to the nimbleness and willingness to take risks demonstrated by Microsoft? That leaves Anthropic, which looked like a big winner 12 hours ago, and now feels increasingly tenuous as a standalone entity. The company has struck partnership deals with both Google and Amazon, but it is now facing a competitor in Microsoft with effectively unlimited funds and GPU access; it’s hard not to escape the sense that it makes sense as a part of AWS (and yes, B corps can be acquired, with considerably more ease than a non-profit). Ultimately, though, one could make the argument that not much has changed at all: it has been apparent for a while that AI was, at least in the short to medium-term, a sustaining innovation, not a disruptive one, which is to say it would primarily benefit and be deployed by the biggest companies. The costs are so high that it’s hard for anyone else to get the money, and that’s even before you consider questions around channel and customer acquisition. If there were a company poised to join the ranks of the Big Five it was OpenAI, thanks to ChatGPT, but that seems less likely now (but not impossible). This, in the end, was Nadella’s insight: the key to winning if you are big is not to invent like a startup, but to leverage your size to acquire or fast-follow them; all the better if you can do it for the low price of $0.

https://www.wsj.com/world/tired-ukrainian-troops-fight-to-hold-back-russian-offensive-they-come-like-zombies-9b4a31a1 The attacking Russian infantry are mostly poorly trained, often bunching up and making easy targets, say Ukrainian soldiers fighting here. “They come like zombies. Some wear headlamps—a happy moment for any machine-gunner,” said Pvt. Bohdan Lysenko, who mans the 25 mm automatic cannon on a U.S.-made Bradley Fighting Vehicle with the 47th Brigade. Drone images show fields littered with the bodies of Russian infantry hit by artillery, including U.S.-supplied cluster munitions. But the Russians keep coming. “They’re not stupid. It’s a strategy,” said Cpl. Mykhailo Kotsyurba, a Bradley commander in the same company as Lysenko. “They look for weak points, then go there. We don’t have enough ammunition, but they have enough people.”

I do not think so at all:). I wrote about the same above. Just was interesting to check prices of companies mentioned and found it funny. No need to look at everything very seriously. And btw, for the next 1-3 years (and maybe longer, we will see) my bet is again on FFH vs any of these companies despite their stronger, non owner/culture part of the moat. The ultimate goal is to make money, not just to own moat?

Just for fun...seems good enough to me:)

It is just speculation, but i think if there will be any hints of deflation, just as the last several times, we will get zero interest rates, QE and MMT resurrected all over again or even on a larger scale, if needed. So maybe I am wrong, but zero interest rates again - sure, possible, maybe even probable, but extended deflation - not sure if it is even possible? Can current financial system work under deflation?

I think they have some moat already but even more importantly are on the way or could have it even bigger in the future, something more BRK like: decentralized unique structure, long term owner operator thinking in insurance and investing and perhaps some larger moaty operating companies and lower non float leverage one day? But this kind moat perhaps will never be as strong or fool proof as moat from some brand, network effect or similar and will always depend much on ownership, management, culture, execution etc. But it seems to me FFH is in possession of all these ingredients today and I do not see anything changing in the foreseeable future. However, as others have pointed above, perhaps we also have to admit, that some of the future success of FFH will clearly depend on external circumstances and most importantly, the level of actual interest rates in the next 5, 10 or 20 years. I have no strong opinion myself on this (one can choose what to believe from Howard Marks and his sea change to Cathy Woods and her deflation thesis:)), but the scenario of some extended period of zero rates again somewhere in the future perhaps is not completely unthinkable? In such case what FFH could earn, what float is worth and how market views insurance business would be impacted. I say it half jokingly, but maybe after all they should do some macro again and hedge somehow from extended period of zero rates, if it is possible to do in a reasonable way:)?

Very well said!

https://www.investing.com/news/world-news/taiwans-former-us-envoy-wellknown-in-us-vilified-by-china-named-vp-candidate-3238505 It seems that so far really not much has changed and doubtfully will in the foreseeable future. And just because of elections in Taiwan soon and in US later are coming. It will be interesting to see if that fentanyl will even stop flowing, at least for a moment, from China, as was agreed.

https://www.cnbc.com/2017/05/06/warren-buffett-it-doesnt-take-any-money-to-run-largest-companies.html I do wonder sometimes. Especially since there were at least a few very good periods to do this (last year or at the start of pandemic) and also these companies are large enough for BRK. But perhaps the simplest answer is that they already own like half of their portfolio in Apple and WB just likes and understands it the best. So no need to diworsify?

Thank you very much! So it seems there is more than enough skepticism and pent up anxiousness regarding FFH if we jump to the conclusion of 'same old...nothing has changed' just because of some fake headline and some tiny housekeeping deal done:). After share price up almost 50 per cent YTD, maybe some of this is understandable, but also to expect that nothing wrong will ever happen with FFH or some of its investments...would be just crazy:)? And just to remind, even after 50 per cent up this year it still trades at just 1 BV:). Far from priced to be perfect I guess? Given all positive fundamental developments and especially changes in bond portfolio, i would argue that FFH at current price is almost as exciting as a year ago.

https://www.bloomberg.com/opinion/articles/2023-11-16/biden-xi-summit-china-plans-for-world-domination-become-clearer “The ‘laws of the jungle’ of international competition have not changed,” Xi told Chinese military officials in 2014. All that matters, he added a year later, “is whether you have strength and whether you can use that strength. Relying on a silver tongue won’t work.” To paraphrase Musk, Xi has said the actual truht:)

Not a bad movie about the beginning of McDonald's, kinda investing related:). Scene about land:

So folks are bashing/discussing FFH for buying more BB, yet nobody cares if it is actually true:)? Or am I missing something?

Thanks, yes, maybe I should have said 'this decision' instead of 'this deal'. I understand lemon situation here, however, looking from today's perspective, how this does not make a lot of sense just because of taxes?

This is interesting, thanks! But do I understand this correctly: is it some extra 4 M for them to spend for a 500 M or say 75 M, at a rate of 15 per cent, in possible tax benefits for FFH:)? If this is true, then this deal is more than a ten bagger just on this tax benefit basis:)))

Maybe a dumb question, but where could I see direct info on FFH adding BB? Isn't it supposed to be reported somewhere under insider transactions? https://dataroma.com/m/ins/ins.php?t=y&&sym=BB&o=fd&d=d

https://www.businesswire.com/news/home/20231116657046/en/Farmers-Edge-Announces-Fairfax-Privatization-Offer

https://www.bloomberg.com/news/articles/2023-11-16/biden-again-calls-xi-a-dictator-showing-limits-of-cooperation#xj4y7vzkg