boilermaker75

Found this one posted by Globalfinancepartners on the Chucks Angels board, http://www.bondbuyer.com/issues/122_136/berkshire-hathaway-gives-insurance-pledge-on-higher-valued-detroit-debt-1053778-1.html

Hey GFP, Thanks, Boiler PS I think this year is the Saint's year again! Geaux Saints!

Is anyone a subscriber to Insurance Insider, have read the following article, and can give us a synopsis? http://www.insuranceinsider.com/berkshire-already-making-inroads-in-lloyd-s-e-and-s-business TIA, Boiler

I don't live in CA, so the CA sales tax you paid does me no good! ;) Actually, my daughter lives in West Hollywood, so it is helping her. I'm old enough to remember when IN first adopted a 2% state sales tax. Our current rate is 7%. I know from visiting my daughter you have it worse. If your daughter: has a job; has a significant other with a job; and/or lives off of invested capital earning a return; then CA taxes are most certainly not helping her. She has a job and owns property. So she is paying CA income tax, CA real estate tax, and whenever she buys anything CA sales tax of 9% in her area. So yes just her CA taxes are a significant amount. I often joke to my wife after we return from a trip to visit our daughter and buy something that the sales tax in CA would have been more than the item, or service, cost here in IN.

I don't live in CA, so the CA sales tax you paid does me no good! ;) Actually, my daughter lives in West Hollywood, so it is helping her. I'm old enough to remember when IN first adopted a 2% state sales tax. Our current rate is 7%. I know from visiting my daughter you have it worse.

However, before they are worth zero, they potentially will distribute earnings. That is true, but as they distribute earnings the IV changes. One thing for sure, the IV of all companies will cease to exist the day I die! The Berkshire model of sweeping the earnings and allocating it to purchases of new businesses reduces the chance of zero. The more independent businesses they own, the less likely that they will all be zeros at the same time. Now, if Berkshire instead were to buy back shares with the earnings, they would be doing nothing to reduce the probability of the shares being worth an absolute zero. How do you think about the IV of BRK? Did the IV change when Buffett bought BRK? I believe Buffett has referred to his purchase of BRK as an investment mistake. So did the chance event of Buffett buying BRK change the IV? Did BRK go from a possible zero IV to whatever it is today?

However, before they are worth zero, they potentially will distribute earnings. That is true, but as they distribute earnings the IV changes. One thing for sure, the IV of all companies will cease to exist the day I die! The Berkshire model of sweeping the earnings and allocating it to purchases of new businesses reduces the chance of zero. The more independent businesses they own, the less likely that they will all be zeros at the same time. Now, if Berkshire instead were to buy back shares with the earnings, they would be doing nothing to reduce the probability of the shares being worth an absolute zero. Until the sun red giants and they are all burnt to a crisp, lol.

However, before they are worth zero, they potentially will distribute earnings. That is true, but as they distribute earnings the IV changes. One thing for sure, the IV of all companies will cease to exist the day I die!

If the intrinsic value of a company never changes, then all companies that ever existed, exist today, or will exist in the future have the same IV. Eventually they will all be worth zero.

A very underrated album. Don't those lines seem especially well suited to investors? This is the kind of stuff Bill Gross would add to his newsletter for color. Intrinsic value is The Final Cut! I prefer: So you run and you run to catch up with the sun but it's sinking Racing around to come up behind you again. The sun is the same in a relative way but you're older, Shorter of breath and one day closer to death. Me too, and I often quote the line, "And then one day you find ten years have got behind you. "

"I disagree. IV doesn't change. Your perception of IV changes along the turbulent path of discovery. You keep trying to predict the unpredictable, and blame it on the IV of the business rapidly changing. No." - Eric Doesn't Eric's comment "IV doesn't change" imply that IV couldn't have been another value? I have issue with that. IV can and does change. +1

There are not multiple possible guesses at IV, but multiple possible IVs. The wave function will collapse to one particular IV when the observation is made in the future, but this does not mean that IV was destined to happen. Or in a many-worlds interpretation you might have BRK with a market cap of $1 trillion at some fixed point in the future in 60% of the universes, but BRK is bankrupt in 0.00001% of the universes.

Exactly. Plus every year there is some probability the plant will blow up. Maybe a 1% chance that it blows up in year 10. So if you could restart at the initial point in time 100 times one of those time-lines the IV would be zero in year 10 and 99 time-lines it would not. Saying there is one IV is equivalent to saying your whole life is predestined and that your decisions just don't matter because they are pre-determined. I have used quantum mechanics in my career and my belief is everything is probabilistic.

I would think MCD would have a lot of real estate on their books well below market value.

While Buffett is hunting with his elephant gun, Sam Taylor of Oriental Trading is hunting with his BB gun, http://www.omaha.com/article/20130630/MONEY/706309972/1697 Also scroll down and play the Nike ad to hear, “Hey, LeBron. It's Warren Buffett. Sure glad you're using that hook shot that I taught ya.”

I disagree. IV doesn't change. Your perception of IV changes along the turbulent path of discovery. You keep trying to predict the unpredictable, and blame it on the IV of the business rapidly changing. No. To get the IV prediction accurate with a higher batting average, and thus fewer investment mistakes, stick to businesses that are more predictable. (that's a "Duh" comment). I guess that by definition of the term "predictable business", you then realize that your IV number is a "prediction of the business"... well, more of the obvious. I would say IV changes in some cases and doesn't in other cases. For example, due to the fact that AMZN is trading at extremely inflated multiples for prolonged time, it is able to issue a small amount of equity to do a lot of things. The IV increase whenever it issues the equity at such extremely inflated multiples. You can run some simple math. Suppose AMZN's book value is $10 per share, and it issues equity at $200 per share and doubles the share count, what is the book value now? It is $105 per share! Who can create value faster than this? Buffet clearly cannot! ;) Then if the market thinks OMG, AMZN is much cheaper now than before, buy a ton! Then the stock price will jump to maybe $400. Those kind of companies' IV has little to do with BV and thus the effect on IV is much smaller. It's substantial but I don't see how they could exploit this forever. Do you have examples of extreme cases that were able to double share price a few times? I doubt they are out there and if they are it simply won't be for the capital injection but market perception of the company / simple momentum. OT: Bought some ITM SD leaps. Is CRM not a good example? They are making reckless acquisitions, so eventually they will go really bad. But assume they can issue shares at such extreme multiples and have our champ ERICOPOLY on the board to manage all the acquisitions, won't you agree that over the past few years, their IV would be growing? My point is, when these kinds of ridiculous companies trade at 100x IV, and they issue shares to acquire companies trading at 0.5x IV, doesn't this increase their own IV significantly? The future is the future. On a rolling basis, it is revealed. Intrinsic value didn't change, you merely witnessed managerial actions that were part of a past future, and this were always reflected in IV. You merely updated you estimate based on revealed information. To more accurately estimate IV, you need to listen to Buffett's list of what he looks for in an investment with low hurdle. I think the future is more probabilistic than that. If you could restart today 100 times and let the future unfold, I think you would get 100 different futures and hence 100 different "IVs." Probably some very drastically different IVs. At any initial set of conditions, the best you can do is your best guess at the most probabilistic IV. For instance, in 20 years the probability of BRK's IV being > $1 trillion might be 90%, but the probability that BRK is bankrupt might be 0.00001%. (I made up these numbers as I was typing.) So either might unfold, but I know where I am placing my bet.

I also have a full time job and invest as a hobby (obsession?).

Wow, thank you very much!

Tracy is now on the board of Heinz http://www.post-gazette.com/stories/business/news/business-news-briefs-berkshire-hathaway-3g-chiefs-join-heinz-board-691734/#ixzz2WIikvdiE

http://articles.chicagotribune.com/2013-06-13/business/chi-allstate-surpassed-by-geico-20130613_1_geico-esurance-state-farm

Berkshire Hathaway launches new property casualty insurance business http://commerciallines.insurance-business-review.com/news/berkshire-hathaway-launches-new-property-casualty-insurance-business-140613

We go through the same thing every year with our Comcast subscription. Our rates go up and my wife calls and asks to speak to someone in customer retention. She ends up getting a new customer enticement package every year.

Wow what a game! Did anyone catch the Black Hawks come back and take game 1 from the Bruins last night in triple OT? I started watching the Black Hawks back in the day of Bobby and Dennis Hull, and Stan Mikita. So I am a big Black Hawks fan.

Thanks writser! Yes Gio, you should get a chair like mine!

BRK/B 25% WFC 5% BBT 1.5% GE 1.5% BAC 1% short puts 79% ____________ total 113% So I would be 13% on margin if put to on everything I am short. After today's expiration, that will come down to just over 1%.