UK

As WMT IIRC:)? https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-stock-price-market-cap-832393c6

Yes, I understand this if you look at it from a fundamental/business prospectives, but as an owner of a liquid security I am not so sure I would be comfortable with a possible ~30 (or more, depending on the valuation) percent hit to a very large position, just because of the risk of reverting valuation. There is a limit somewhere in my mind (or sleep well) for a valuation of any mature business for a very big position (but maybe I would keep something of less than 5-10 percent even at a crazy valuation). Maybe it is >1.5-1.7 BV or even 2 BV for FFH, perhaps something same for BRK, but I think I will know this only if/when we get there, meanwhile I do not see a need to adjust anything meaninfully untill at least 1.5 BV.

+1. And thanks for discussing this. I think big picture/long term we also maybe must take into account, that CAT insurance is only a part of the total insurance economy. I am not sure how much this, lets call climate related potentialy long tail risk, makes of total FFH business though? Also all these loses (I expect) would not be unlimited in any 'asteroid size' case? I expect and trust somewhat, that an insurer, run by a family, whose almost total net worth depends on it, will do a good job of thinking about and managing these risks. Obviously BRK of 2024 seems to be more safe antifragile still, than FFH if 2024, just because of its diversification of the last ~20 years into operating businesess. It would be interesting to estimate in what year BRK was of the same risk as FFH today (somewhere before 2000?). We can always find something, like e.g. supervolcano risk (once in a 50000 years?) or what not (recently watched The Day After Tomorrow with my kid and it provoked some interesting thoughts for me:)) which would probably kill even BRK, or almost every other company, for that mater, so in the end this would not be a financial portfolio level worry anymore...Finally, despite of insiders WB or PW going almost totally fully in, I think it is still a good idea to cap ones investment to a size he can sleep well with. For me it could be as much as 60 percent for BRK (not at the current valuation) and up to 40 percent for FFH. These could change (but more likely to a lower side) in the future. This is also very personal, if ones max position size is 10 percent (which is totally fine and makes sense), then just keep FFH also at this or whatever limit.

Thanks for sharing! I am doing something simillar with this "trading around the core", which sometimes makes total sense for me, since you already know what are you buying/selling very well, only at a lesser degree (perhaps max up to 20 percent of total position) and somewhat more reluctantly, since I am on the hook for a 15 percent tax, for doing this in any case. However, it seems that from the next year (still hard to believe:)) I will be able to use unlimited deferred tax accounts for basically all my investment portfolio, so it will be even less impediment for such trading, meanwhile I was/am moving more and more to a dealraker's style of operating:)

These are really good observations. Thanks!

https://www.bloomberg.com/opinion/articles/2024-08-26/war-in-gaza-is-it-time-for-israel-to-break-iran-s-strangling-loop?srnd=homepage-europe

+1

https://www.ft.com/content/c62ca855-c70b-4814-aa47-96d2a0020c16 In Vienna, for example, Sullivan stressed that Washington was not trying to spark a war, according to the second official. “We’re not trying to drag China into a conflict over Taiwan. Nothing could be further from the truth,” adds the second official, who added that Beijing had become “pretty conspiratorial” about US intentions. Underscoring the paranoia, Xi had told European Commission president Ursula von der Leyen a few weeks before the summit that the US was trying to goad China into attacking Taiwan. “The kind of basic notion of, ‘You guys are playing with fire on Taiwan’ remains a central feature of their thinking,” the first US official says. https://www.ft.com/content/7d6ca06c-d098-4a48-818e-112b97a9497a Xi issued the warning in a meeting with von der Leyen in April 2023 that was described to the Financial Times by several people. He said the US was trying to trick China into invading Taiwan, but that he would not take the bait. Another person said he had issued similar warnings to his officials. The comments provide a window into Xi’s thinking on Taiwan — the most thorny issue in US-China relations. Some Chinese academics and retired military officers have claimed that Washington is trying to provoke Beijing by providing weapons to Taiwan and pushing other measures to lure China into military confrontation. Speaking at the Asia Society in January, Cui Tiankai, a former Chinese ambassador to Washington, said China would “not fall into the trap somebody may be preparing for us”, in a veiled reference to the US. Xi’s remark to von der Leyen is the first known case of him making the claim to a foreign leader. Xi also said that a conflict with the US would destroy many of China’s achievements and undermine his goal of achieving a “great rejuvenation” by 2049. “If Xi genuinely believes that the US actively seeks conflict with China over Taiwan, then concerns that Xi has created an information vacuum or is otherwise getting poor counsel from subordinates are, worryingly, true,” said Jude Blanchette, a China expert at CSIS, a think-tank.

Of course I had. I have traveled to Russia and Ukraine since I was like five years old, because I had lived in USSR until I was nine and we literaly could not go elsewhere:). Later I worked for some projects there. I speak Russian, I love their literature, I have lot of former Russians or Belarusians in my circle and I have nothing against most of its people, as against people of Iran, Venezuela and perhaps N. Korea. Their regime is the problem though. It is their and some minority's interests above others. Look at Venezuela or N. Korea, this is a way Russia is going now too and nobody ask the opinion of the average Russian or he is going to a jail for 20 yers for expressing any. I was also much more optimistic about China and CCP once, but I am not sure anymore (at least for now). I like Chinese too:).

I admit Russia has its interests. Even Putin has his, perhaps over other Russians. This reality is a tragedy for some of its neighbours, who also have interests. I am also not even saying they were completelly unprovoked. I do not know how to solve this. But I am 100 percent sure I do not want their way of life to spread behind their borders or any further either:)

Luca, I am 100 percent sure, that most Ukrainians (maybe except for a few in Donbass) genuinelly wanted to move to the west, as they do now, even more, after all they have endured! Also: "Well, of course America’s done bad things, but one needs to look at the whole track record" Sorry, but this post of yours sounds to me like blaming democracy for its minuses (the worst system, except all the other), or Buffett, for not giving up 1 or whatever percent of his net worth, he will leave for his family:) Or can you tell me then, which alternative is better? Would you personally would like to live under Russian/N. Korean/Venezuelan or even Chinese system? Why then people from all over the world flock to the western world in general and US in particullar? Btw, Luca: https://www.lrt.lt/en/news-in-english/19/2324121/more-germany-in-lithuania-vilnius-drafts-new-strategy-for-relations-with-berlin For the record, I welcome and thankful for this foreign interference of Germany into our affairs no less as from US, the more, the better:)

Perhaps lots of choices / scenarious / risks is still possible, for Ukraine and more globally: https://www.wsj.com/politics/national-security/autocracies-china-russia-us-election-5dc42efb?mod=hp_lead_pos8

Same for me/do not disagree:)

https://www.reuters.com/world/us/worlds-largest-3d-printed-neighborhood-nears-completion-texas-2024-08-08/

This is a valid point in terms of aggregate market data, but then, there are so many nonsense in it already (like different adjustments to get 'operating' EPS), I think it is just better to simply haircut this EPS of SNP500 by some 10-20 percent, if you want to be conservative, or to take into account FCF data. I think, currently (as at most of the time), these are not very pretty for an aggregate market (but maybe they are still not super scary expensive either) no matter how you look at or adjust them:)

You can look at the progress of BV, which also includes portfolio market fluctuations. You can look at the gaap and operating earnings and portfolio separatedly, for a two column valuation method. Or you can look at operating earnings and look through portfolio earnings to get some kind of normalised earning power and PE number for BRK. You can compare the outcomes of all three between them and also historically and even with what WB had said about one or another of them (in the letters). You can easily do this yourself (I would encourage) or read ~200 pages of Samper Augustus yearly report, where he puts everything ready for you. Why would anyone worry or care at all about this standard too much or anything else in terms of valuing BRK?

Not only your track record, but also this, is really impressive. I owned >50 percent of BRK once (and would do this again at the right valuation), but ~80 percent in just two stocks (or perhaps it would be better to say businesses, as you see them) is really the different level of the game:)

I think you need to find what works for you and with what you can sleep well. If you can follow some kind of system or semi formulaic aproach, perhaps you can do very well even with 50 positions of the same size. For me it would be almost impossible to do. Even these small basket positions, they usually just clutter my mind and I find myself giving the same amount of time and energy to a 2 percent position as to a 20 percent and this makes no sense at all. Also I trade or sell smaller stuff much much easier, so I find it surprising, that you think concentration is conflicting with holding long term, as it is the opposite for me. Finally, mentally I am not able to process/think about more then 5-8 things at the same time. I used to use a lot of excel etc for this (also for valuations etc, which was also silly), but slowly came to the conclusion it just makes no sense for me either. It is also much easier to find a few new ideas. I really do not buy anything for a big position I think I could not just forget and leave it for a 5 or 10 years. I do not leave them and watch them closely, but I really could (this may even lead to a better outcome). Also, I have to agree with dealraker's wise wife here: concentration excites me way more (this also could be dangerous, as more important thing is to make/not lose money, not the excitement). So again, all this is very personal, but If I was not allowed to own anything of more than 5 percent, I would probably just went 100 percent ETF tomorrow:). Most people around me own like 80 percent or more of their net worth in a real estate, often in one or a few buildings in the same city (owning real estate for investment is a national sport in my country), yet they consider owning stocks directly, especially of some meaningful amount, as very dangerous or even speculative. I find this very funny:)

+1 I laugh everytime when I hear (Russian propoganda?) that being in EU or NATO is something same or simillar of being in the USSR or Russian orbit. It is like comparing Valinor (or whatever is the place those elves live) and Mordor:). Even Elon Musk (the realist?) gets this: "The US did conspicuous acts of kindness like the Berlin Airlift. And I think it’s always like, well, America’s done bad things. Well, of course America’s done bad things, but one needs to look at the whole track record and just generally, one sort of test would be how do you treat your prisoners at war? Or let’s say, no offense to the Russians, but let’s say you’re in Germany, it’s 1945, you’ve got the Russian Army coming one side and you’ve got the French, British and American Army’s coming the other side, who would you like to be just surrendered to? No country is [inaudible 00:27:58] perfect, but I recommend being a POW with the Americans. That would be my choice very strongly."

Counterintuitively so far my portfolio concentration grew together with overall capital and time. Some 10 years ago I used to own 10-15 positions (before 2009 I even owned some funds/etfs), while recently (~5 years) it was only 4-7 bigger 10-20 percent positions (with a few exceptions of even bigger ones) and a baset of 5-20 percent size of smaller, 1-2 percent, positions. This basket part really is not working very well for me and so it is not settled and more of on/off, but maybe by still using it, I avoid doing something stupid in a big way (by buying just a small position of something I have not enough conviction to make big). My plan is to diversify somewhat more in the future, perhaps by capping max position size more strictly and also by allowing some smaller 5-10 percent positions by not selling any winners totaly only because of their valuation (will see if this works:)). It seems that being somewhat more concentrated really makes sense and works for me well, because I do not feel I know what I am doing another way:)

ERF.PA, the only one large for me in the last 3 month (and YTD) at 46-48 EUR in July. Actually the second largest YTD was also MW related: small add to FFH in February. Anything else bought YTD were sub 2 percent non meaningful stuff.

I posted this because this sounded good...and right. Look, I get all this realpolitik talk, but I also lived through the something very simillar in my own country. All world, from Nelson Mandela to who not, were lecturing us and warning not to mess with USSR for our own and greater good. Of course one can say that we just got lucky. As we did. But you also do not have a chance of luck, without even trying. Shorter version: my mind is much closer to your position, but this is not a place my heart is:)

This. I think being 70 percent in cash is way overdone and seems like a timing (likely futile) bet. Personally I can not imagine and would lose my sleep staying long in such position. Not least because of the PTSD of experience of money losing much of its purchasing power very quickly (like 50 percent or more for a few years). But 20-30 i think is enought if you are scary of averything and want to be prepared (I do not feel very diferently for a while now), because this level at least would not screw you totaly if you are not right. PS: even if you change your mind, you do not need to adjust your position 180 degree overnight and can do it in a year or two.