UK

https://www.bloomberg.com/news/articles/2022-10-06/bill-gross-sides-with-pimco-bond-bulls-in-seeing-yields-peaking?srnd=premium-europe https://www.wsj.com/articles/when-interest-rates-rise-fast-markets-tend-to-break-how-to-spot-the-cracks-11664974804 I would still guess they will not pivot soon, at least not until something really brakes. Just SnP itself at -20 probably is not enought this time. It would be easier to try to call a bottom if SnP was at least -30, after some heavy selling with VIX above 40:)

You can think and discuss a lot of arguments (asset quality, management, etc) but I would say the main to reasons is a. BRK also owns operating businesses, which constitutes like half or more of its value and b it is still somewhat cheaper than the market, while probably more safer/resilient/etc.

https://www.wsj.com/articles/ukraines-new-offensive-is-fueled-by-captured-russian-weapons-11664965264 One Ukrainian battalion, the Carpathian Sich, seized 10 modern T-80 tanks and five 2S5 Giatsint 152-mm self-propelled howitzers after it entered the town of Izyum last month, said its deputy chief of staff, Ruslan Andriyko. “We’ve got so many trophies that we don’t even know what to do with them,” he said. “We started off as an infantry battalion, and now we are sort of becoming a mechanized battalion.” 0The chief of staff of a Ukrainian artillery battalion on the Kharkiv front said his unit now operates four recently captured Russian 2S19 Msta 152-mm self-propelled howitzers, alongside American-made guns, and now has abundant Soviet-caliber ammunition. “The Russians no longer have a firepower advantage. We smashed up all their artillery units before launching the offensive, and then we started to move ahead so fast that they didn’t even have time to fuel up and load their tanks,” said the officer. “They just fled and left everything behind.” Combined with weapons taken during Russia’s retreat from Kyiv and other parts of northern Ukraine in April, these recent gains have turned Moscow into by far the largest supplier of heavy weapons for Ukraine, well ahead of the U.S. or other allies in sheer numbers, according to open-source intelligence analysts. Western-provided weapons, though, are usually more advanced and precise. Ukraine has captured 460 Russian main battle tanks, 92 self-propelled howitzers, 448 infantry fighting vehicles, 195 armored fighting vehicles and 44 multiple-launch rocket systems, according to visual evidence compiled from social media and news reports from Oryx, an open-source intelligence consulting firm. The real number is likely higher as not every captured piece of equipment gets filmed.

i agree. At first they overdid it to one side, now, maybe they are overdoing to another:). Maybe summer rally shocked them and they just wanted financial conditions to tighten, so they started to talk about all this pain in order to bring infliation down, just that markets would get a message. Gee, FED pivoted in 2018 end after just 20 market drop. Maybe they wiil stop soon, before something really brokes, or maybe only after. I think nowbody knows. Perhaps better to turn attention to questions such as FB or GOOG is a better buy:)))

Re rates: but the good news is that more and more of good news, which is bad news:), are turning into bad news, which is good news:) Re self correction: i am not sure if FED or any other CB, at least if they care about not turning country into some banana style economy (and US has worlds reserve currency, some call this exorbitant privilege or something), can choose not to react to situation. Usually by making mistakes to both directions:) Again, look at Turkey, they kept rates way lower than inflation for quite some time now, and it seems it is not working very well: Personally I have no idea if infliation is transitory or not and even if somewhat normal rates is such a bad thing. It is easier perhaps to look on relative basis and it seems US is ina quite good position comparing to almost every place in the world: https://www.bloomberg.com/news/articles/2022-10-03/inflation-in-europe-now-looks-even-less-transitory-than-in-us

The ministry was responding to a comment on Oct. 1 by the Russian Defense Ministry that Russian troops had successfully redeployed to “more favorable lines of defense.” The Ukrainian armed forces responded with a mocking post on Twitter. “We thank the ‘Ministry of Defense’ of Russia for successful cooperation in organizing the ‘Izyum 2.0’ exercise,” “Almost all russian troops deployed to Lyman were successfully redeployed either into body bags or into Ukrainian captivity. We have one question for you: Would you like a repeat?”

Maybe somebody will renew this with Powell:)

I understand, that one years earnings is only small part of the value, etc, and this relates only to SNP as a whole, but historically I think it is a good yardstick to look at the total market through this F PE valuation lenses, because it provides, if not perfect, then somewhat normalised basis: It is interesting, that putting some 4 per cent growth on the SNP500 earnings for 20 years (ant 2 after that) at some 10 per cent discount rate you would also arrive at around 16x fair value for the whole market, so this 16x seems like fair/reasonable multiple for the total market. We are at it know, but the main problem I think is that those future earning estimates is still anticipated at around 240 for 2023 (and have not changed a lot from spring i believe) and comparing to estimated 210 for this year, it anticipates some 14 per cent earnings growth. I am not sure if this is not to optimistic? Those estimates always too optimistic, but in this case I am afraid they are just terrible lagging (and perhaps already getting adjusted in the markets mind) and if you put more conservative number, like same 200 and a still "not distressed" multiple of say 15x, you would arrive at 3000 for SNP500. If I had to invest only in SNP, below that level, I would be fully invested and perhaps, below some 12x, even add some 20-30 percent leverage, especially if it would be clear at that time, that rates will not rise anymore/are going down. I also like these charts: But perhaps all this does not mean nothing at all if you invest in a particular companies and have somewhat longer horizon than 6-18 month. Also it will be very interesting to see what team BRK will do in this environment, after all those writings about buckets and raining gold, they did not so much in 2020 spring, and later explained, that it was because that situation was really special/unknowable (which I agree it was), this year I think they (Tod?) said, that this time situation is more from their playbook. But maybe they just wait for that phone to finally starting to ring again, another way to time the bottom:), and also something to think about while trying to answer threads subject question.

You are not the only one asking these questions:). From 2020 letter: "When our partnership distributed its Berkshire shares in 1969, all of the doctors kept the stock they received. They may not have known the ins and outs of investing or accounting, but they did know that at Berkshire they would be treated as partners. Two of Stan’s comrades from Emdee are now in their high-90s and continue to hold Berkshire shares. This group’s startling durability – along with the fact that Charlie and I are 97 and 90, respectively – serves up an interesting question: Could it be that Berkshire ownership fosters longevity?"

For fun: “SPX 666 (GFC low) to 3333 (QE bull high) to 2222 (COVID) to >4444 (QE supernova) to 3333 (bond bear); we nibble 3600, bite 3300, gorge 3000,” https://www.investing.com/news/stock-market-news/big-low-wont-be-in-before-q1-no-huge-rally-until-policy-panic-occurs--bofas-hartnett-432SI-2902877

I have no idea and do not invest based on such things, but after reading about all this "pension margin call" situation, you really start to wonder, that it feels a little bit like 2007, when everyone quickly started getting educated on subprime stuff:). It was zero interest rates and unlimited QE policy for 14 years and 10 years from last major financial/market dislocation (EUR crisis until whatever it takes). At the start of the year, almost all assets where on the expensive side, if not in a bubble and when rates go up by such magnitude after such long time (and before this bond market was in bull market like forever), who knows what interesting things could happen? In 2018, when FED tried to raise rates, markets went down like 20 per cent and it pivoted:) But this time I think it not so easy to do or very hard for them to do in a major way before time. At least not until major dislocation (hopefully/probably not in US at first) or at least more substantial market drop:). However it leads to a much more exiting times in the markets, just look at GOOGL, was at like 30+ PE year ago, now it is <18, on relative basis, on par with SNP!, on absolute basis, taking growth into account, perhaps also well above 10 per cent return at this price in the long term. More on LDI (new term for me:)): https://www.bloomberg.com/opinion/articles/2022-09-29/uk-pensions-got-margin-calls?srnd=premium-europe&leadSource=uverify wall UK

https://www.economist.com/briefing/2022/09/28/an-investigation-into-what-has-shaped-xi-jinpings-thinking

https://www.wsj.com/articles/the-banker-and-bailey-circus-andrew-bailey-liz-truss-britain-bond-purchases-bank-of-england-monetary-policy-11664401241?mod=hp_opin_pos_1 https://www.bloomberg.com/opinion/articles/2022-09-29/uk-can-t-afford-to-look-as-ridiculous-as-truss-kwarteng-have-with-gilts-crisis?srnd=premium-europe https://www.bloomberg.com/opinion/articles/2022-09-29/the-uk-s-trussonomics-market-mess-has-france-fearing-contagion?srnd=premium-europe

Thanks, yes, but than I compared those possible losses (acctually 0.7 and 5.6 B) to market CAP of FFH and BRK and come to 6 and 1, respectively.

Thank you. So, if I understand correctly, at upper bands, it would be something like about 6 per cent from CAP for FFH (and 1 per cent to BRK).

https://www.bloomberg.com/news/articles/2022-09-27/hurricane-ian-threatens-to-overshadow-andrew-s-devastation?srnd=premium-europe Would FFH felt substantial impact if such predictions come true?

https://www.wsj.com/articles/amazon-berkshire-hathaway-could-be-among-top-payers-of-new-minimum-tax-11664098382 The UNC analysis comes with caveats. Lacking confidential tax returns that would allow precise calculations, the authors used publicly available financial data. Companies might change behavior to minimize taxes. A one-year snapshot includes unusual situations that cause companies to pay the minimum tax once, generating tax credits that can be used in future years. Under the new law, companies averaging more than $1 billion in publicly reported annual profits calculate their taxes twice: once under the regular system with a 21% rate and again with a 15% rate and different rules for deductions and credits. They pay whichever is higher. The new system, known as the book minimum tax, starts with income reported on the financial statement, not traditional taxable income. Differences between the two—the treatment of stock-based compensation, for example—could drive a company into paying the new tax. According to the UNC estimates, Berkshire Hathaway would have paid the most in 2021, at $8.3 billion—or about a quarter of the estimated total—followed by Amazon at $2.8 billion and Ford Motor Co. at $1.9 billion.

https://www.wsj.com/articles/u-s-warns-russia-of-catastrophic-consequences-of-using-nuclear-weapons-in-ukraine-11664116188 https://www.theatlantic.com/ideas/archive/2022/06/russia-ukraine-nuclear-weapon-us-response/661315/

In the oher news: https://www.cnbc.com/2022/09/22/turkey-cuts-interest-rates-again-as-country-struggles-under-inflation.html Erdogan, meanwhile, remains optimistic, predicting that inflation will fall by year-end. “Inflation is not an insurmountable economic threat. I am an economist,” the president said during an interview Tuesday. Erdogan is not an economist by training.

And TSLA still >CAP 800 B!

https://www.wsj.com/articles/the-market-still-isnt-priced-for-a-proper-recession-11663857523 i have no idea, but just for fun, speaking about this whole FCF vs rate question, I think in the 1H and until yesterday most of the stock market drop was driven by rate vs fcf and valuation rerating of more expensive/growth companies, together with long bonds. No idea if and when, but If market starts to price some hard landing, earnings drop and some second order effects (just look at GBP), lower inflation, and then deflation:), then value/high FCF/short duration/leveraged things could lead decline? either way very exiting times possibly is coming again:) UK

https://www.bloomberg.com/news/articles/2022-09-23/ackman-touts-immigration-over-rate-hikes-in-inflation-fight Fortunatelly for US it is fixable thing? https://www.bloomberg.com/opinion/articles/2022-08-14/niall-ferguson-demographics-are-a-us-headache-but-nightmare-for-china?leadSource=uverify wall

https://www.bloomberg.com/news/articles/2022-09-20/biden-s-vow-to-defend-taiwan-makes-us-policy-shift-explicit

https://www.bloomberg.com/news/articles/2022-09-16/germany-s-rosneft-seizure-kicks-off-test-of-oil-infrastructure