LC

@2CC: that is true but in practice, MF is not designed to exploit capital structure nor is it aimed at PE firms. MF is composed of a quality (ROIC) and cheapness (EBIT:EV) component. Assessing price based on EBIT is assessing the price of the entire enterprise, which I would argue is more useful to a takeout firm than a minority equity investor.

This is a very fair counterpoint to the "Buffett did nothing!" criticism. You can earn a great return investing 6, 12 months after the crisis when the smoke has cleared.

That's correct - to hit LT capital gains tax. Also what bothers me is putting conditions. "MF outside the US" Okay, when that doesn't work what will it be next? "MF outside US and Southern Europe" "MF outside US, S. Europe, China" "MF on these 30 stocks from another screener I just ran" Also, I don't like using EBIT. I never have. Is interest not an expense? Taxes? Do they not provide informative value about the business itself? I'd argue they do.

Yesterday I sold a portion of NLSN; also closed short call positions in IRM, T, PM. PM I bought back at cost essentially; T & IRM I bought back for 90+% gains.

Aside from the question of, "what is the right valuation metric": If you assume a business is only worth the sum of its cash flows at a properly discounted rate, then valuation is all that matters. You invest, you get the cash flows over time, and if there is value then those CFs are higher than your investment. But I wonder - is this definition of "what a business is worth" too limited? For example, a business issues financial securities. Those securities are bought, traded, sold, shorted, borrowed against, derived against etc. etc. An entire chunk of the economy has been created to allocate these securities. Is that not valuable? And if so, to whom should that value be assigned?

fareast, thank you for posting. I think this is fair criticism. I have been wondering when is the appropriate time to ask the question, "What do people think of WB's actions during Mar/Apr?" The follow up questions being, "what does this indicate for a long-term investor in Brk, and what is the function then of the 120+B cash balance?" Perhaps it is still too early to ask such questions, but I think anyone making a meaningful investment in Brk needs to question these factors.

Doubt I think is a necessary but uncomfortable feeling when investing. You are wading into the unknown. Doubt avoidance is attempting to know the unknown, or exercise control over something you may not be able to control. In my opinion doubt is unavoidable. It is impossible to know the future. Putting blinders on may feel more comfortable (and may incidentally still pay off), but I don't think it is ever smart to put those blinders on. You have to make calculated decisions with less than perfect information.

Personally, I think it's a great topic. Name & shame, baby! My contribution: William Erbey of Ocwen et. al. fame. - I wouldn't invest in his crap with my worst enemy's money! And should we add Mickey Pearson of Valeant/Philidor to the list? I think so, I won't invest alongside him either.

This reminds me of the Buddhist who went to the hot dog stand, "I'll take one, please". The vendor says, "OK, how would you like it?" The Buddhist: "Make me one with everything" He pays the vendor with a $20 but then asks,"Where is my change?" The vendor says in reply, "Change comes from within"

Agree. But to be fair not a lot of elderly (most at-risk COVID group) are protesting, at least from what I've seen

Again a little bit of Berkshire, some Livenation as well.

Capital allocation depends on having a multitude of options. The problem is you can have incredible capital allocation with zero good options to invest capital into. I.e. when a good businessman meets a bad business - the bad business wins.

Bought a tiny bit of Berkshire.

The power of deregulation: Years before the nation's nursing homes experienced a heavy COVID-19 death toll, the Trump administration rolled back the federal rules and regulations put in place by the Obama administration aimed at improving infection control in these kinds of facilities. https://www.salon.com/2020/05/30/by-undoing-obamas-nursing-home-regulations-trump-opened-the-door-for-the-deaths-were-seeing/

I bought some LYV yesterday.

Bit of a gnarly one: “The first thing you should know about working in a mortuary," the teacher said as he removed his latex glove and inserted a finger right up the ass of the body on the table, "You can't be squeamish." He then stuck his finger in his mouth. The students grimaced as he motioned for them to line up and do the same. When the last student had stuck their finger- right up to the knuckle, the teacher insisted- and stuck the finger in their mouth, the teacher said, "The second thing you should know about working in a mortuary is attention to detail. I stuck my middle finger in, but sucked my index finger." The class was horrified. Some of them threw up. "The third thing you should know," the teacher said as he picked up his briefcase, "Is that I don't work here." "And the fourth thing you should know," said the man lying on the table with a smile, "Is that I'm not dead“

Per euromomo, Europe appears out of the woods as excess mortality has reached baseline levels and in some cases below.

You post a lot about tribal leadership. And there is this aura of mystique that seems to go along with it. To me, This usually raises red flags in the “snake oil” department. Or at best, a fancy way of paying people less money to do more work. Therefore, can you provide some case studies/use cases to understand what exactly it is?

Some thoughts on incentives: There are always multiple incentives at work; and surface-level incentives (or behavior) may only be a means to achieve deeper desires. For example take a look at the urban office space thread. Here we see multiple incentives at play: -Companies want to reduce costs while maintaining work quality & quantity. This is really companies wanting to be more efficient and durable. Long term, what is the effect? Will they be able to attract & retain the best employees? -Employees want a variety of things, and often different employees want different things. Most want to improve their quality of life. How does a WFH policy incentivize employee behavior in the short- and long- term in this context? Will it incentivize employees to move to lower-cost areas? Personally I moved to Denver years ago and have been working remotely ever since. My incentive was to improve quality of life and this was a means to do so which benefited myself without harming my employer. Now given COVID, perhaps I could argue it achieves the incentives of both parties. My point is that WFH is a surface level incentive. If you dig deeper you see it achieves deeper wants of both employers (become more resilient) and employees (increases quality of life - or at least provides an option to do so). If you take it a step further, I would say the best incentives are not simply "long term" as CM suggests, but actually are meant to achieve deeper incentives for all parties involved.

Three contractors are bidding to fix a broken fence at the White House. One is from Chicago , another is from Tennessee , and the third is from Minnesota. All three go with a White House official to examine the fence. The Minnesota contractor takes out a tape measure and does some measuring, then works some figures with a pencil. "Well," he says, "I figure the job will run about $900: $400 for materials, $400 for my crew and $100 profit for me." The Tennessee contractor also does some measuring and figuring, then says, "I can do this job for $700: $300 for materials, $300 for my crew and $100 profit for me." The Chicago contractor doesn't measure or figure, but leans over to the White House official and whispers, "$2,700." The official, incredulous, says, "You didn't even measure like the other guys! How did you come up with such a high figure?" The Chicago contractor whispers back, "$1000 for me, $1000 for you, and we hire the guy from Tennessee to fix the fence." "Done!" replies the government official. And that, my friends, is how the new stimulus plan will work...

Not the 350,000 dead people? I'm being slightly unfair but I think the point is that you have sensationalized the topic of reduced office space. Personally I don't think there will be a "death of urban offices", but I do think we will see a measurable reduction in office space. How much? I would guess maybe 10-15% over the short term. And further, I think we will see companies rethink current and future processes to reduce their reliance on physical office space. But the counterpoint is that for most people, work is a part of our identity and we are social creatures. So we will want to work around our colleagues. From a selfish point as a REO in a Tier 2 city (Denver), this would somewhat benefit me.

I think Orange's post and the subsequent replies illustrate the problem. You have a large amount of resources (human and capital) working on projects that are useful - but not profitable. Nobody questions that Uber/Lyft/etc are a vast improvement from calling a taxi service or hailing a cab. But why own these businesses if they cannot generate profits? Why invest in them? Why hire thousands of developers? Is it unprofitable because the product is underpriced? Or the cost structure is bloated? Or some other reason?

There is an element of trust in being the reserve currency, in being the lender of last resort, in being the "safe" asset. China's problem is nobody trusts their regime. This is going to need to change for them to take over in the minds of market participants. I actually thought with COVID they would position themselves to address this but it has not really been the case.

Right - the question is not whether masks are effective. It has been proven that they are. It's a respiratory virus, for pete's sake - of course masks will be effective. The question(s) are why masks are not widespread. Liberty addressed this one at least hitting the main points (poor federal leadership - a common theme during this pandemic). And the follow up is, if mask use does become widespread - is this sufficient to "reopen" the US economy?

S Korea: If you want to open up the economy then by all means provide masks weekly to everyone in the US, provide fast and free testing, take our cell phones and track our every move to inform tracing, provide free healthcare to those infected...i.e. perform ALL the steps that these Asian countries took, not just the ones that appeal to you.