cubsfan

I'm excited. This is so much better than xmas! :D Around what time? It's usually 6:00 AM EST for 3 hours - all of Squawk Box with moron Kernan.

The BAC investment is insane. Best investment he's made in the last however-many years. What's IV on the warrants right now? If you have a strong opinion on BAC, as many on this board do, the compounding on that until expiry is gonna be awesome. For any of you that understand account way better than I do: The economic value of this BAC position today is $10.9B. What is the accounting book value of the position? The preferred stock is classified as available-for-sale, so it is carried on the books at fair value. Ok, thanks - so the Book value of the position is $10.9B - correct? And it's not understated. Previously I should have said both the preferreds and the warrants are AFS, not just the preferreds. Where do you get the $10.9B? The sentence in the letter where Buffett says "At yearend these shares were worth $10.9 billion."? I'm not sure the exact amounts are disclosed or if similar prices can easily be seen. But without being precise, the preferreds can be called by BAC at $5.25B, so they are probably worth close to this (given the directional movements of rates and credit spreads/worthiness). The warrants can be exercised into shares worth $10.9B at an additional cost of $5B, so the intrinsic value is $5.9B (at year end). These don't expire until 9/2021 so there's a lot of time value also (option value= intrinsic value + time value). Not sure how much this is valued at, but regardless we can say that the preferreds and warrants combined are on the balance sheet for at least $11.15b ($5.25B + $5.9B), probably a bit more. You are correct, they should not understated unless Berkshire intentionally marks them conservatively for some reason, which is doubtful. Yes, thanks for that clarification - what I meant was the $10.9B minus original cost - to get a net figure reflected in current book value. I stated it poorly - but that was what I was getting at. I don't remember all the rules for the accounting values of derivatives, warrants, etc - so your AFS explanation is perfect. I wanted to know if the BAC intrinsic value was understated because of accounting rules. Thanks for bearing with me. On page 56 of the annual report the valuation inputs for the preferreds and warrants are disclosed. Since BRK holds other preferred stocks, the total preferred value for BRK is not broken out but par value is a good estimate. The warrants are valued using a warrant valuation model and have a 9% discount for lack of marketability. Packer Thanks for pointing me to that section with the table of discounts.

The BAC investment is insane. Best investment he's made in the last however-many years. What's IV on the warrants right now? If you have a strong opinion on BAC, as many on this board do, the compounding on that until expiry is gonna be awesome. For any of you that understand account way better than I do: The economic value of this BAC position today is $10.9B. What is the accounting book value of the position? The preferred stock is classified as available-for-sale, so it is carried on the books at fair value. Ok, thanks - so the Book value of the position is $10.9B - correct? And it's not understated. Previously I should have said both the preferreds and the warrants are AFS, not just the preferreds. Where do you get the $10.9B? The sentence in the letter where Buffett says "At yearend these shares were worth $10.9 billion."? I'm not sure the exact amounts are disclosed or if similar prices can easily be seen. But without being precise, the preferreds can be called by BAC at $5.25B, so they are probably worth close to this (given the directional movements of rates and credit spreads/worthiness). The warrants can be exercised into shares worth $10.9B at an additional cost of $5B, so the intrinsic value is $5.9B (at year end). These don't expire until 9/2021 so there's a lot of time value also (option value= intrinsic value + time value). Not sure how much this is valued at, but regardless we can say that the preferreds and warrants combined are on the balance sheet for at least $11.15b ($5.25B + $5.9B), probably a bit more. You are correct, they should not understated unless Berkshire intentionally marks them conservatively for some reason, which is doubtful. Yes, thanks for that clarification - what I meant was the $10.9B minus original cost - to get a net figure reflected in current book value. I stated it poorly - but that was what I was getting at. I don't remember all the rules for the accounting values of derivatives, warrants, etc - so your AFS explanation is perfect. I wanted to know if the BAC intrinsic value was understated because of accounting rules. Thanks for bearing with me.

The BAC investment is insane. Best investment he's made in the last however-many years. What's IV on the warrants right now? If you have a strong opinion on BAC, as many on this board do, the compounding on that until expiry is gonna be awesome. For any of you that understand account way better than I do: The economic value of this BAC position today is $10.9B. What is the accounting book value of the position? The preferred stock is classified as available-for-sale, so it is carried on the books at fair value. Ok, thanks - so the Book value of the position is $10.9B - correct? And it's not understated.

The BAC investment is insane. Best investment he's made in the last however-many years. What's IV on the warrants right now? If you have a strong opinion on BAC, as many on this board do, the compounding on that until expiry is gonna be awesome. For any of you that understand account way better than I do: The economic value of this BAC position today is $10.9B. What is the accounting book value of the position?

Thanks for the comments - when you say they do 50% of biz in UK - do you mean outside of Ireland? Also, sounds like they will have a quasi-monopoly in Ireland, when and if that economy turns around?

IRE is acting like a tech stock - anybody understand why the dramatic rise?

Fantastic read - thanks for posting.

That looks like a valuable property or lease. Sears has been there since 1912!

According to this article the property was indeed owned by Sears http://www.willowbrookil.org/DocumentCenter/Home/View/350 According to the Property Assessor site 840 Plainfield Rd. is listed at a tax value of $1.6 million http://www.dupageco.org/PropertyInformation.aspx parcel # 09-23-405-018 http://www.dgtownship.com/search.php parcel # 09-23-405-018 Great - thanks for the info Matson.

Thanks for the heads up - Spier had a great interview here last fall: http://www4.gsb.columbia.edu/filemgr?&file_id=7314104 Definitely looking forward to reading his book.

Last spring, the local K-Mart about 6 miles from me closed. Sold for $12M. It's a nice suburban Chicago location. I am assuming it was company owned. http://articles.chicagotribune.com/2013-07-16/news/ct-tl-willowbrook-restaurant-opening-20130718_1_chick-fil-a-kmart-willowbrook-town-center ChicagoRealEstateDaily.com reported in February that the developer, James Dremonas, owner of Pete's Fresh Market, paid $12 million for the Kmart store in Willowbrook. The Kmart store closed in the spring. Wondering if this is representative of the sales we are seeing? Also wondering what you could gleen from the tax records as to the value that property was assessed at previously?

Love it!

Good for you TWACFA and ONYX - that's real leadership. You got my 1% today. ....and I'm not at all dissatisfied in any way - I love this board.

Try UK-based Aggreko (AGK.L) Benefits from large network of service centers that are unlikely to be duplicated unless one wants to spend several billion dollars. This gives them significant advantage in service and deployment. (kind of like Caterpillar). Company still small, but operates in 130 countries, and has steady 20-30% ROE for 10 yrs. Plenty of opportunity for growth and reinvestment.

In 2008 I bought a 1996 Mercedes S-500 for $8,900. It had 90,000 mile and was driven by a car nut - so it was beautiful. Purchased new, it's a $90,000 car, but of course I was buying a 12 year old car - it just looked new. But a car like this has 200,000 mile life if it is taken care of. I'm still driving it and absolutely love it. I'm partial to big luxury cars, just don't like to pay up for them. And in 2008 everyone was throwing away there gas guzzling SUV's with oil well above $120. This car sat unsold for 5 months. I've never bought a new car.

I love it!!

Starts with "A" - maybe Alleghany - which is Y?

Haha. On a less dramatic note, it is totally within Sanjeev's rights to say as much or as little as he wants. There are a number of fantastic posters here. No need to pressure anyone to do anything - that's not what we're all about. Sanjeev created this ecosystem. That's more than enough for me. Completely agree - while I'd love to hear Sanjeev's opinion more often - I would think his first obligation is to his shareholders. If his posting here somehow conflicts with his fund - then he needs to do what's right for them. And he has created this great forum, which is self-sustaining and well established.

Enterprise Software Sales & Sales Management - 28 yrs

How funny. I really liked Greenwald's book and did not like Whitman's book at all. I'm sure Marty's book was great - but it's so tough to read.

I remember that interview when it was done live a few years ago. Steinhardt is a total blowhard POS. He is still pissed from the time when Munger and Buffett unfortunately had to take out his buddy John Gutfreund from Salomon. If Gutfreund had not tried to protect their rogue trader multiple times from the Feds - he would have not gotten himself fired.

Michael Price - 40 minutes - ww.marketfolly.com/2013/06/michael-prices-presentation-from-london.html

Agree with the above interviews - and for 2013 - would add Ken Heebner, Chuck Royce and Marty Whitman. These were all excellent interviews.

Merry Christmas everyone! After my first full year on the board - I'm so impressed with the outstanding investor thinking and sharing of ideas here. I hope all have a great 2014 - and may the Cubs finally win the world series!