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Everything posted by LC
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Maybe it;'s just me but that was not really a convincing answer by WB. Essentially Howard's job is to collect a paycheck and make a CEO change if they pick "the wrong guy"? Firstly, the job description of COB is not that simple. If the CEO of Brk and CEO of one of the major subs have a big disagreement, in most companies, the board usually steps in or provides input. Howard will have a voice and a responsibility, regardless of whether "he has interest or not". Second, even in the severely limited role that WB specifies, WB doesn't answer how Howard is qualified. How does HB know who the right or wrong CEO is? Wouldn't you need some knowledge of the underlying businesses to make this decision? "Protect the culture" - looking past the ambiguity of this phrase, WB still doesn't say how HB is qualified. All WB says is that, "Howard cares enormously about protecting the culture and protecting the shareholders" and he has a "enormous sense of responsibility". This is wholly unsatisfying as a job qualification, and pretty suspicious that the selected individual with this "enormous sense of responsibility" happens to be WB's son.
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Really? I didn't see it in this thread. I will check your post history. Thanks\ Ah found it - must have scrolled by ;D
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Exactly. You have to look at actions, not words. The reality is that HB is simply not qualified. Someone should ask this question at the next Brk meeting (just kidding, it will never pass whatever question screening they have in place).
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Post whatever, as whomever, you want but if there’s context I’m not going to ignore it.
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Partially correct. Motives are important. Imagine this: someone posts a stock idea. Now as an investor, you will never know 100% of the details regarding how to value this stock. You know what the financials tell you, what your due diligence tells you, etc. but you will never have a full picture. Now, what if you find this person is a paid promoter for the company? Wouldn't you want to know this? Wouldn't you want to understand the biases and incentives underlying a stock pitch? This is why disclosure statements exist. Liberty makes a good point. Despite anonymous names, we all build up some social cache here on this message board. Or at the very least, over time people understand our biases and incentives. Of course content matters, but so does context. You need both.
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Holy cow. Too much brain damage to me, outta here!
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Dude what the *$#$? Trying to pick up a 16 year old at Exeter Academy as a 30 year old? I don't know what "more to the story" there can be. Who picks up high school girls as a freaking adult? And Eric, keep your crappy behavior outside of the 914 area code. Anyways - was interesting to hear you speak, Spek. Funny how Eric could not pronounce the name....it is a typical latin pronunciation. But you were the star of the show and more importantly, knew your stuff - well performed!
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Yep - I have not done the exercise outside of my mind but that is what I concluded the result would most likely be. Everytime someone says that "Buffett's age is the risk" I think, well if he died tomorrow and they started such a runoff, it would probably increase the speed at which Berkshire's value is "realized". Regarding buybacks vs. dividends - Once Warren is gone, I prefer dividends. I don't trust the next guy to buy appropriately. While Warren is alive, I prefer neither. I'd rather give him as much opportunity to find another elephant.
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I am in the ~25% bucket. Picture this (mental exercise, not a prediction): Buffett and Munger gone. Existing Berkshire businesses and CEOs continue running their respective businesses as usual. All excess cash flows are dividended out. As these existing businesses CEOs retire, etc. they are all sold and proceeds dividended out. Essentially a slow portfolio runoff of the life work of Warren Buffett and Charlie Munger. What is Berk worth in that scenario?
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Fiat Chrysler needed to go thru BK to rationalize their business. They’re doing Ok now.
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Just stick to the top left (or bottom right depending on how you arrange it) corner and you'll be OK :) For bad biz - good mgmt examples, wasn't it the designer from Apple who went to JCPenny (or Macy's - I forget which) for like a week? Eddie and Sears come to mind.
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My point is that it was a period of time where market pricing would have made things worse. Credit was incredibly tight. If the market had set rates, they would have risen or stayed at spiked levels: https://voxeu.org/article/credit-conditions-and-great-trade-collapse Interbank rates (here, the one-month rate) spiked in September 2008 in many economies, as banks became extremely averse to lending and the supply of financing tightened. There are nevertheless key differences in the severity and timing of the credit crunch. In countries such as Germany and Bulgaria, the interbank rate was on an upward trend until an abrupt reversal in November 2008. In contrast, these rates were declining from a much earlier date in Canada and Singapore, reflecting earlier interventions made by central bankers there to cope with the impending downturn. Our results suggest that the impact of credit conditions was sizeable. The decline in trade volumes would have been about twice as large in percentage terms had interbank rates instead remained at the high levels of September 2008 throughout the rest of our sample period. Central Banker's/Avocado's decision to cut rates has been universally acclaimed and is evidence of a Central Bank's positive contribution.
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Mine are a bit sloppy to calculate as I liquidated to buy a house in Jan. Will try to calculate and post for completeness' sake Looks like I'm up somewhere between 5-7%. Pretty much sold everything late Jan and started reinvesting in Dec, so not really useful.
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It's outside the feds circle of competence too. Interests rates, the time value of money, are a market phenomenon. You might as well have a government board set the daily price of Avocados. Can I ask your opinion on the Fed slashing interest rates in the 2009-2013 period. This was most certainly not a market phenomenon, as credit was drying up. The Fed's action essentially re-started the US economy and prevented a depression. Beautiful deleveraging and all that. Do you think they were wrong, or lucky, or something else?
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Charlie Munger and Li Lu interview in China (august 18)
LC replied to Lakesider's topic in Berkshire Hathaway
That's true and on retrospect my comment was a bit harsh. I don't think the mental latticework whatnot is useless - it certainly is not. Combining disciplines can and has produced novel ideas and inventions. But - I think if we are going to look to examples of that for emulation, we should pick from successful ones that truly embody the principle. Elon Musk for example build a payment processor and now look what he is doing. Or Bill Gates who built one of the greatest companies and now charitable funds. CM, while certainly a great guy and teacher, did not (as far as I know) take his investment billions and develop some incredible technology elsewhere. And to be fair, he is an incredible investor and in my opinion that is enough in itself to deserve acclaim - but to characterize him as some polymath investor-philosopher...this is stretching the hero worship a little too far for my taste. Of course I still asked him to sign a copy of his book for me! ;D -
Charlie Munger and Li Lu interview in China (august 18)
LC replied to Lakesider's topic in Berkshire Hathaway
Munger has some antiquated opinions and this is one of them. Important to realize just because these two are investing geniuses, does not mean that extends to other aspects of life. Which is to be expected considering stories of WB’s fixated personality. And to Munger being a generalist - in the best sense you can say he is, but only as it applies to investing. In the worse sense, well it is just not true. Finally and this last bit is just my opinion, but I think the whole “ mental models / latticework” is a crock of baloney. And you can look at the examples CM used to illustrate as proof - they are all primative. More good has been done by people specializing and becoming an expert in a certain field than by amateurs jumping around trying to form a “latticework”. Frankly IMHO it’s an arrogant statement of his, probably stemming from the same place his comments on Chinese superiority come from. -
I disagree a bit with the above posters. Take a college level accounting textbook and you're 90% of the way there. The other 10% you learn looking at specific companies and trying to figure out their P&L. I certainly don't think accounting is a lifelong process and I don't think management accounting was worth much of anything. But that's my two very zinc filled cents.
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Ideal yes but difficult to establish that position. In my position probably education/consulting is the lowest barrier-to-entry option. Difficult to gain access to royalties without developing the specific implementation - and difficult to do that without structuring an incubator as you say. Well, Cheers and happy hunting ;D
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I agree. The technology exists, eventually it will be adopted where applicable. The question is how best to position yourself to profit.
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Exactly. Goes beyond voting as well - although I do think it will be useful in that area. Can be useful in the tax field, tracking shell corps, and trying to draw a clearer line between tax evasion vs tax reduction.
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Thanks SD. I also did some further reading and it seems promising. There is some work being done at Carnegie-Mellon on this specifically. There are some items which are still drawbacks, one being you still need an "in-person" location to hand out and verify keys. Second, it is not "unhackable" but it is very difficult. Also I think one of the Carolinas used some form of blockchain voting in a primary election this year. I think it's the way forward...hopefully could provide some lift to voter turnout, increased accountability and traceability.
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To all the experts here - question for you. So for anyone who has mistakenly clicked into the Politics section and read a few incoherent threads there, one topic that comes up is voter fraud and voting turnout. I would think the that in a perfect world, everyone could vote online, everyone would have some identity token, etc. Obviously In reality this is open to all kinds of fraud and hacking vulnerability. My question is, could some distribute ledger technology be employed to solve this problem?
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Merry Christmas, Happy Holidays to the COBF family...and to everyone's real family too :D
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I don't think you have to be an expert here. To use the WB quote about being approximately correct: From a birds eye view the economy has been doing great under a low interest environment for what, 7 years? Therefore, time to start raising rates. That's my "approximately correct", 1000 ft view. Regarding the minutiae as to "well they should've done XYZ 6 months ago or whatnot", well just seems like noise...trying to figure out if the guy on the scale is 200 lbs or 205 lbs.
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Yes and this is reflected in a one-time change in NPV.