JBird
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Posts posted by JBird
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thank you sir. so for uber, with a $17 bn valuation and $125 mm 2013 revenue, we're looking at 136x revenue. seems reasonable, particularly since they face no competition, regulatory hurdles, or expenses.
Hahaha
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Hire talented engineers, give them a vision, remove obstacles to success, and get out of their way.
What we (and when I say 'we' I mean the Earth's civilization consisting of individual people) really need is a complete and total separation of science and state.
+1
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Thanks for posting. Amazing stuff.
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Some investments might go to zero, so the rest has to bring more profits than you lose on your losers. Its much easier with buy @50% of IV and sell at 100% because then every loser is made up by one winner.
The ones currently trading at 70% of IV present the same risk/reward to both investors.
Both the man who bought at 50% of IV and still holds it at 70% IV on the way to 90% of IV.
As well as the man who buys it at 70% of IV for the first time and will sell at 90% of IV.
You are right, the winners need to recoup the losses of the losers.
However, when it is currently at 70% of IV the actual cost basis on your shares is irrelevant.
It took a while, but not surprisingly I find myself agreeing with Eric again.
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Thanks for posting Liberty!
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First set of notes on BRK 2014 AGM
Thanks so much
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Best case scenario you're going to sit 50 ft away from Buffett so in my view it's not worth getting there pre-dawn to get the best seat possible. I show up at 6:30 and grab a seat directly across the arena from the stage so I don't have to turn my head to look at them for 5 hours. It's not jam-packed in that area, and the view is absolutely fine.
In terms of getting nearby Buffett or Gates maybe my experience will be helpful. Last year at about 7:30 I walked to the convention center area. I saw Ndamukong Suh chilling with Kathy Ireland over at the newspaper toss and wandered over. Nobody was around. I was right next to the rope. 20 minutes later I had just enough room to breathe. Buffett and Gates were heading over. Suddenly I'm looking over the shoulder of the ceo of nfm. Buffett walks right up to him and asks for yesterday's numbers. (The man is obsessed with numbers). Anyway, I was close enough to see his eyes shifting across the page. If you want to get close and hear him crack a few jokes with Gates this is the route to go. (The bodyguards were saying no autographs btw)
As for lunch, the arena food is fine, but it's super basic and costs ~10 bucks if I remember correctly. There are several restaurants within walking distance, but of course make a reservation if you wanna take that route.
This is one event you would be absolutely insane not to be sociable at. Ask some basic questions to the people around you and chances are you're going to meet somebody worth remembering.
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That's surprising considering $2.2 billion worth of BRK common is being shorted right now. (Source: Fidelity and Y-Charts)
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Just called in. They still do not have a date scheduled but I'm now on the callback list for when it is scheduled-- I'll update again when I hear back.
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I am new to CBF. Who are some of the smartest CBF members (e.g. Packer16)? I want to learn from their old posts. My apology if this topic has been done before.
Just start reading the threads. It will become quickly apparent.
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I've been thinking about Russia's chronic P/E problem and have begun to wonder if it really matters as long as the stocks maintain high dividends.
You have the opportunity to buy a stock that trades at 100 and pays a dividend of 10. Assuming no growth we can consider two scenarios over a 15 year holding period.
1) the stock doubles and dividend proceeds are reinvested
2) the stock remains at the same price and proceeds are reinvested.
Does it surprise you that investors actually stand to make more in scenario two? I guess my point is that the ability to reinvest at chronically depressed prices is a boon for investors over the long term. Obviously you could make the argument that once it doubles you could sell and invest in something else that subsequently doubles, but there's no guarantee those opportunities will be around or revalue quickly.
I don't think chronic discounts are a bad thing. Rather, you can invest in them and reinvest the dividends in the chronically undervalued security when you have difficulty finding better opportunities and then reinvest the dividends in other companies once you think you've found a quality double. These are simply a vehicle that allow you to compound the free cash flow coming into your portfolio each quarter rather than compounding capital gains. You wouldn't ever need to hold much cash if you knew you could reliably have a portfolio that would yield 10% in cash each year.
Am I wrong to think this way? It almost seems like the same reason Gio likes Lancashire. It replenishes his cash.
This is somewhat akin to Buffett's hope for a dwindling IBM stock price. I don't think it's illogical. But of course if the goal is to maximize your investment in the company you're far better off having the company repurchase stock than reinvesting your dividends.
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My favorite part of reading this book was thinking back on stories from my life that involved the models explained in the book. If the story was like a movie, recalling it with these new models in mind was like putting on 3D glasses. Anyone like to share such a story from their life?
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Would love an audio feed. Happy to compensate someone for making the effort.
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On the way back from the airport I once asked the cab driver to pull over, still a mile away from my house. I couldn't stand watching the meter rise anymore.
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Anyone know what their min investments is? 100k, 500k or 1mm+
That's a good question for info@arlingtonvalue.com. Or you can contact Ben Raybould directly at 801.505.6275.
Don't be surprised if they don't pick up. They're busy.
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Circuit breaker?
Why bother?
Just put a satellite phone transmitter with battery backup with gps receiver. Have that in the tail of the plane or somewhere that pilot and crew can't access.
That way, when the power goes out it still runs off of the backup battery.
This is obviously all easy stuff that can be implemented in a way that can't be shutoff mid-flight by anyone.
That makes far too much sense.
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Not knocking the guy ( because he has obviously earned it many times over!) but those are actually pretty high fees to pay a long only w/o a an absolute or index hurdle.
Is it actually 15% of gross profits? Or is it 15% of outperformance ( much better, even better if hurdle compounds is hard and has a clawback). Those fees are at the high end of any long only institutional manager I've ever come across ( not hedge funds, people bend over for alpha). The toniest of hedge funds that have been launching long only products don't charge 2.45%.
He has earned it, deserved it, and his investors have prospered, but it is despite the fees, not because of them.
So lets say he makes 10% and SPY makes 10%, he gets 1% + 0.15*9= 2.35%. Or with the flat fee he gets 2.45%. I don't thinke he should make anything in that hypothetical year.
I don't want a fee structure where I give 20 +% of profits to someone even if they just make what the index did in a given year. 1% and 15 over something seems fine though.
I'd prefer 0 and 25 over index or a reasonable absolute number. Even though I would've paid more fees and be less wealthy than the current structure and it would've been better under the current regime, on principle I don't want to have to count on knock your socks off performance to come away with good net returns.
Since the AVM ranger fund started in July of 2008, it has returned 32.2% compounded annually net of fees, versus 9% for S&P 500.
Who the hell cares what the fees are when the returns net of fees are so spectacular?
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The Berkshire position was scaled back to 40%. They own those shares at least partly on margin (they're paying ~1.5% interest).
They're currently holding ~13% cash.
The fee depends on which of the funds you're in. AVM accredited asset fee is 0.20% per month, about 2.4% annually. AVM qualified is a 1% asset fee plus 15% performance fee.
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Arlington gained 51.5% in 2013, 42.6% net of fees. Congratulations to Allan and Ben.
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To the extent you are rich and continue to work, (like buffett) you provide to help society become more efficient and produce productivity gains. Even if your work is limited to investment decisions, you are helping society allocate capital efficiently.
If your contribution to society is efficiently allocating a few million dollars in a multi-trillion dollar market, you haven't contributed much.
If you have one productive job in a world with billions of productive jobs, you've contributed a massive amount?
I think "per capita" contribution is the relative metric. And a few million dollars on a per capita basis is statistically significant.
Well I think you're right and I want to make a distinction. Elon Musk has efficiently allocated capital to create several productive businesses that have benefited society. That I think is wonderful. I would contrast that to a passive investor who trades stock certificates all his life to get wealthy. It's not to say the latter hasn't done anything for society, but in my view it's not worth much praise.
However, you have contributed something. I (think) what is being discussed here is whether it is a net positive, neutral, or net negative effect on societyYea, fair enough.
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To the extent you are rich and continue to work, (like buffett) you provide to help society become more efficient and produce productivity gains. Even if your work is limited to investment decisions, you are helping society allocate capital efficiently.
If your contribution to society is efficiently allocating a few million dollars in a multi-trillion dollar market, you haven't contributed much.
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Why do you think BRK will be able to grow operating earnings at a double digit rate?
Because it's earning double digit returns on incremental capital in its five largest operating businesses (which account for 68% of operating earnings).
But long-term returns will rest mainly on the company’s ability to increase its book value. That’s not great news because, as Mr. Buffett has warned, it’s starting to slow down.Long-term returns will rest entirely on the company's ability to increase intrinsic value, not book value. If stock prices dwindle and share repurchases start, per-share book value will fall and per-share intrinsic value will rise. The price will follow the movements of the latter.
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Thanks for posting the transcript.
BUFFETT: WE ACTUALLY IN THE UNITED STATES HAVE ALMOST ELIMINATED OUR CATASTROPHE INSURANCE BUSINESS.
Surprised by that.
Worst capital allocation ever
in General Discussion
Posted
This is a great thread!