oscarazocar

That's a silly and almost meaningless observation. Almost all major sports are defined by slight edges multiplied by many attempts in the game, similar to blackjack. In baseball, a player who gets a hit 31% of the time is bound for the Hall of Fame and a hitter who gets a hit 28% of the time is a reasonably good player who few will remember. It may seem intuitively like Federer should have won 65% of the points of whatever, but that's just way outside the parameters of the game. All the top players in history are clustered similarly - Djokavic and Nadal also won 54% of their points. Specifically, in tennis, roughly half the time the player is serving and half the time he is returning. Federer won 70% of his serves and 38% of the points where the other guy served. That's why the number is going to end up a few ticks above 50%. An average grand slam tennis match has around 200 points. Winning 54% of the time over 200 points is total domination.

@John Hjorth You are giving the guy a very hard time when he is well-meaning. Below are the relevant parts of the letter. If you don't know a lot about brain cancer, you could easily take from reading it that Spier expects to maybe live 10-20 years, when the reality, which he does not state for understandable reasons, is that the odds of someone with recurrent glioblastoma surviving even a few years are very low. (Although I will caveat that by saying that his cancer may have certain features which vastly improve his odds vs typical recurrent glioblastoma cases.) I wish Spier the best. It's an interesting topic - doctors are generally <extremely> wary of giving even patients themselves the cold hard facts about specific illnesses. If you hear someone has a disease and want to know their odds, search "Kaplan-Meier survival plot" and the disease. That's going to give you the best numbers, and the more specific the chart is to the exact profile of the disease, the more useful it is. For instance, say you are an adult with Acute Myeloid Leukemia (AML) - the first thing they do is run a test and it spits out the specifics mutations you have. While the overall survival rate for adults with AML might be 20%, the ones with your mutation might have a 50% survival rate and those with some other mutation might have a 5% survival rate. https://www.eortc.be/tools/recgbmcalculator/Curves.aspx "The tumor was small, the doctors caught it early, and I immediately underwent the appropriate treatment, so my chances of beating the worst outcomes were good, and I continued my life as normal. However, that changed in September 2025 with an unclear MRI and minor (or focal) seizures. These led to a second craniotomy and the conclusion that the cancer had returned. This recurrence changed the calculus for Aquamarine Fund. Previously, I could have every hope and expectation that the cancer was in remission and that my top priority of compounding our capital could remain unchanged. The recurrence meant I could no longer say that. Although my mind and investing abilities remain intact today, we have no way of knowing when that might change. My condition could stabilize for a long time, or it might not. While I continue to have every hope of living a long and productive life, that is less likely than before. The range of outcomes has widened considerably. Faced with that uncertainty, I knew I had to reprioritize my life. Up to this point, despite my many outside interests, my top priority was to continue to compound your capital at Aquamarine Fund. This is no longer the case. My top priority has become my health and spending precious time with my family."

That’s not him. He is zeke375.

Robert Miles says definitively here at 32:35 that Weschler was behind the Apple investment at Berkshire, in recounting his interviews with Weschler.

What's going on with this one?

My bet would be that is a sloppy translation and what they write as "Musk persuaded Charlie to invest with him" is actually "Musk tried to persuade Charlie to invest with him." The interview is translated from Chinese and there is a lot of rough translation in there. For instance, "The first time I had a long conversation with Charlie was on Thanksgiving Day in 2003. We talked for four or five hours, and then we officially became partners. It has been 20 years since he passed away." https://moiglobal.com/wp-content/uploads/li-lu-on-charlie-munger-202412.pdf

Immelt was a heroically bad CEO, mostly because of terrible large scale M&A, with a unique talent for buying at the top and selling at the bottom - Alstom Power, Baker Hughes, NBCUniversal, etc. For those who like big company disaster porn, there are two books on the topic that are very good - Light Out by Ted Mann & Thomas Gryta and Power Failure by William Cohan

What is the source for Combs bringing the Apple investment to Berkshire? I have talked to a few investors who believe that Combs has tried to take credit for the Apple investment (see Graham & Dodd breakfast in 2023 where he implies it) when they think that Weschler is the one who initiated it, and that seems to fit a pattern where Weschler stays quiet on things and avoids taking credit and Combs tries to puff up his importance. Buffett and Weschler have both pointedly refused to acknowledge whose idea it was directly. Make of that what you will. There is a lengthy comment from VIC floating around where someone litigates the case against Combs. Here is a 2016 interview with Weschler where he discusses Apple and Berkshire. https://blog.umd.edu/davidkass/2016/10/23/ted-weschler-explains-berkshire-hathaways-investment-in-apple-to-german-magazine/#:~:text=Warren Buffett's portfolio manager was,disclosed whose position Apple is. Here are the Combs 2023 breakfast notes: https://investmentmanagementinsights.substack.com/p/graham-and-dodd-annual-breakfast

People like to make this all much more complicated than it is by dressing it up in these terms like "scaled economies shared", or Tren Griffin goes on about "wholesale transfer pricing" like it's some new thing he discovered. https://25iq.com/2013/06/12/wholesale-transfer-pricing-and-the-free-parking-business-model/ "Scaled economies shared" means you have a structural low cost position and you maintain a constant margin/relative price in order to grow faster and reinforce the advantage. Buffett has talked about this, I think somewhere he made the comment that if you have a 10% cost advantage to your competitors, it's like putting your competitors through a meat grinder. Over time, you grow steadily and maintain reasonably constant ROE and margins (maybe you show a little margin growth over time). This is GEICO, Progressive, Costco, Nebraska Furniture Mart. A nice thing about finding these companies is that, depending on the specific nature of the competitive advantage, it can stay in place for a long time and you can grow for decades as you take share from competitors who have a higher cost position and can't compete with you. You see this clearly with GEICO and Progressive going from low single digit market share to teens market share over last several decades. It's why Costco limits gross margin on products to 14% on third party products and 15% on private label products. "Wholesale transfer pricing" is nothing more than gold old fashioned pricing power, exercising power over your suppliers to either pay them less or demand other benefits because you have a strong market position.

The $450M you cite above isn't related to RYAN's past taxable income, it does not foot to the $1,216 EBIT they have generated. It's the undiscounted estimated future payments related to the TRA. Whenever a unit is converted, it creates a future tax benefit over 15 years. TRAs are generally structured (and is so here) so that the company pays 85% of that tax benefit to the unitholder and keeps 15%. The liability is the estimate of what the company will pay out over time related to the TRA. C corp shareholders aren't really getting a raw deal, basically they are paying a slightly lower tax rate than they otherwise would. You can argue over the whole structure and whether or not it's unfair that the company doesn't keep the whole benefit, but the structure has been in place for decades and is now commonly accepted.

I don't think it's a hate fest to point out that someone is nowhere close to being in the top 10% of his field. It's important in investing and life to be reasonably accurate about relatively objective assessments like that. Baker Mayfield is a good quarterback but he's nowhere close to being in the top 10% of his field, I'm a a fan, it's not an insult. I think it's fairly common to have 3 generations of a family in the same profession. My dad was 5th generation in a small family business. My best friend and his dad & grandfather are lawyers. I think you don't see it too much in investing nowadays because the business was very small before, really, the 1980's so there just hasn't been that much time. Run ahead 30 years and there will be a zillion funds/investment firms that grandpa started in the 1980s, son joined in 2010, and granddaughter joins in 2040.

I think you'd be hard pressed to find any metric by which Chris Davis could be considered in the top 10% of the field as an investor. Davis NY Venture Fund (flagship) has underperformed S&P 500 by 340 bps in last 10 years (15.3% vs 11.9%, 250 bps over 20 years (11.0% vs 8.5%), and 60 bps (9.2% vs 8.6%) assuming he took over in late 1998, it's unclear when dad handed over the CIO reins. It's amusing, in his 2007 interview in Value Investor Insight they quoted the 10 year record vs S&P but in the 2015 interview they switched to quoting the 46 year record of the fund of outperforming because the 10 year at that point lagged by 160 bps.

Shareholders of common equity of Fannie Mae/Freddie complain about the NWS, but one argument I have found persuasive on the other side is that the only reason that Fannie/Freddie make such large profits is because of the implicit government backing. Shareholders are trying to have their cake and eat it too - keeping the profits due to the government backing but then complaining . When everything went sideways, the government stepped in and took ownership, and that was ruled legal by the Supreme Court. That doesn't seem entirely unfair in the scheme of things. The entities were insolvent post-GFC and the government stepped in. When companies file Chapter 11 and ownership gets reshuffled, the old equity shareholders don't get a claim when 10 years later the company is making tons of money. Shareholders don't like how the ownership was reshuffled in this case (first 80% to government, then 100%), but that ship has sailed legally. Of course, the government could reshuffle ownership again, but that seems like entirely a political decision and claims of "fairness" ring hollow to me.

I don't know of one good comprehensive book, but there are biographies on a number of the main players that pretty much get you to the same place - Gould/Harriman/Hill/Vanderbilt/Van Sweringen/etc. Jay Gould The Life & Legend of Jay Gould - this one is very long and comprehensive if you really want to get in the weeds. https://www.amazon.com/Life-Legend-Jay-Gould/dp/0801857716/ref=sr_1_5?crid=1DT0JUYCR277U&dib=eyJ2IjoiMSJ9.mt1TVjMgDxRFQIwlIxM4hPV0l22aVLApBZWPBgpq1JhL-7Jl7JbQIMmhyvZbGE2Ik3d2SJY_fGtJh-T8RMqt1XXnoRjALrtYXVmQKSdQEBIRRw3XHSNYqLKZIwnbbxE5Cv-pw9XEtBmhWtxj-bt71AJPFE9XN3YaXIYI_I9ggoAc7ebuJyWbmUb4XAYU70Hl-o7lA-XBvtkiMrogh4XTAoPYl42373TUapdAzKdEl-0.eivntz0f3KI-gtT-ullz3pNZKJ5wiBx_c-8QQSLu5FU&dib_tag=se&keywords=jay+gould&qid=1758552446&s=books&sprefix=jay+gould%2Cstripbooks%2C92&sr=1-5 American Rascal - this and the next are more recent and shorter, I preferred Dark Genius https://www.amazon.com/American-Rascal-Streets-Biggest-Fortune/dp/1982107405 The Dark Genius of Wall Street https://www.amazon.com/Dark-Genius-Wall-Street-Misunderstood-ebook/dp/B00A9XVLXI?ref_=ast_author_dp_rw&dib=eyJ2IjoiMSJ9.EnZgMbypos3lT9P404GKZ77XPuOy-TJ-ePHURf3_tfgbJ0pW0CU4W-BHNgdDtRgLWLzw9jix-tMB3uLfyg3VE3AfXWm-pAQReul_Nh6xK7C67x0wgXIuXjrdDBFJz0FvrbHJwNpuRlmp1sIlTBFacJmI7afXHaQXMqN6whAuguKRzVzQvoi0QWC03DmfYVK4JiIL6ERyKlcUZmp20Xw-Ft42jJtIjcO_6R5u3yWWMPw.9D0SbHQhHFYfQkHmzXQSFYmLhQxRQROchUn_dQdPL_Q&dib_tag=AUTHOR Van Sweringen brothers - I haven't read this but it is supposed to be excellent https://www.amazon.com/Invisible-Giants-Clevelands-Sweringen-Brothers/dp/0253341639 Charles Morris - The Tycoons - good broader coverage of all robber barrons, I thought this was great https://www.nytimes.com/2005/10/02/books/review/the-tycoons-benefactors-of-great-wealth.html Harriman vs Hill - I think Buffett recommended this somewhere years back, he blurbs it. Very well written account of Harriman/Hill 1907 battle and resulting panic. https://www.amazon.com/Harriman-vs-Hill-Streets-Railroad/dp/0816683646 Vanderbilt https://www.amazon.com/First-Tycoon-Epic-Cornelius-Vanderbilt/dp/0375415424

In September 1975, there were two serious assassination attempts on President Ford within a few weeks of each other. In one case, the woman attemped to fire a gun at Ford from two feet away. She hadn't correctly loaded a round into the chamber so the shot didn't go off, and she was tackled by Secret Service. In the other case, the woman got off two rounds from 40 feet away, one missing Ford's head by 5 inches, the other striking a bystander. https://www.history.com/articles/gerald-ford-assassination-attempts-1975-lessons https://en.wikipedia.org/wiki/Attempted_assassination_of_Gerald_Ford_in_Sacramento https://en.wikipedia.org/wiki/Attempted_assassination_of_Gerald_Ford_in_San_Francisco Bryan Burroughs, co-author of the excellent Barbarians at the Gate, wrote a terrific book a few years ago on radical violence in the 1970's, Days of Rage, that I highly recommend. The number of politically motivated bombings and hijackings then dwarfs what we see today. https://www.amazon.com/Days-Rage-Underground-Forgotten-Revolutionary/dp/0143107976

A number of public companies have a tax credit operation - Berkshire, Nelnet, Liberty has done it in its various entities. Hershey's has a surprisingly large business here and has invested $250-300m for years which lowers their tax rate by about 950 bps per year. If you want to get into the weeds on HSY, you should probably back this out and tax their earnings at a ~24% rate you shouldn't capitalize the full reduction to the required investment. They are very high IRR investments but low multple of invested capital, basically if you invest $250m you get out a large amount of that in year one then a small trickle for the following few years. https://hershey.gcs-web.com/static-files/2d5e444c-3c3b-49f2-b359-6f6b0841409e

Exactly what direction have they chosen to go that you don't like? Haven't dug in on this one in awhile. Thanks.

Buffett seemed to say at the 2024 meeting that he more or less changed his mind about who would do the investing at Berkshire after he left and thinks it should be the CEO, see answer below. I don't know that he's ever clarified this. https://steadycompounding.com/transcript/brk-2024/ BECKY QUICK: All right, the next question comes from Slavin Vucelbrot. As CEO, will Mr. Abel be in charge of the portfolio of common stocks that Mr. Buffett has been managing, or will this function be exercised by Mr. Combs and Mr. Weschler? As investing could be defined as the discipline of relative selection, can major capital allocation decisions, such as large acquisitions, be separated from the common stock selection process? WARREN BUFFETT: Yeah, I would say that decision actually will be made when I’m not around, and I may try and come back and haunt them if they do it differently. But I’m not sure the Ouija board will get that job done. So that job, I’ll never know the answer on whether it [will] get covered, but I feel very comfortable about the fact that it will be made by a board, that they’ve got loads of brainpower, they’ve got a dedication to an unusual institution, and they will figure things out. But I would say that if I were on that board and were making the decision, I would probably, knowing Greg, I would just leave… I would leave the capital allocation to Greg. And he understands businesses extremely well. And if you understand businesses, you understand… you understand common stocks. I mean, if you really know how business works, you are, you are an investment manager. How much you manage, maybe just your own funds or maybe other people’s [funds]. And if you really are primarily interested in getting assets under management, which is where the money is, you know, you don’t really have to understand that sort of thing. But that’s not the case with Ted or Todd, obviously. But I think the responsibility ought to be entirely with Greg. The responsibility has been with me, and I farmed out some of it. And I used to think differently about how that would be handled, but I think the responsibility should be that of the CEO. And whatever that CEO decides may be helpful in effectuating that responsibility. That’s up to [him or her] to decide at the time they’re running the money. So I would say that my thinking on that has developed to some extent as the sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. [It] just doesn’t work. And I think that when you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things, and I think Greg [is] capable of doing that. I think I’ve missed a lot of stuff in the past, so I’m actually wiser about doing that now. But I, you know, I would do it better this time around in 2008 and 2009 if something akin to that happened. But it won’t be exactly like 2008 or [2009], you can be sure of that. But you also can say that there will be times when having huge sums available extremely quickly… Maybe it will be once every five years, probably [more like] once every ten years or something. But as the world gets more sophisticated, complicated, and intertwined, more can go wrong. And there’s no sense going through here exploring the possibilities of the different things that could happen. But you do want to be able to act when [something] happens. And I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move. It wasn’t that people didn’t have money in 2008. It’s that they were paralyzed. And we did have the advantage of having some capital and eagerness to act, and a government that, in effect, looked at us as an asset instead of a liability. And I think that all of those qualities will be even more important as our capital pile grows. So I think Greg may have even more fun than I had in a period when extraordinary things were happening, and we were the logical place to go. You never know whether it’ll be next week, next year, [or the] next decade, but you [know], it won’t be a century from now, that is for sure. [The more] intertwined and sophisticated the world financial situation gets, the more vulnerable it gets in a certain sense. It solves a lot of small problems, but it leaves [the system] more vulnerable to large problems. GREG ABEL: Without directly answering the question? WARREN BUFFETT: Greg, does that bother you at all or not? GREG ABEL: I think there’s one important thing, [and that] is I think as we go through any transition, it’s important to know that the capital allocation principles that Berkshire lives by today will continue to survive. Warren and I think that’s the thing I’d want to communicate. We have our operating businesses, insurance, [and] non-insurance, [and] we’re going to [support] that. We’ll provide them the capital necessary to be successful and grow, if it’s appropriate. At the same time, we’re expecting [a] return of capital from them when they have excess cash. And then, as we’ve discussed, or you’ve touched on, always looking at potentially new businesses as a whole or in a piece, and as you’ve always highlighted, and I fully agree, it’s… we’ll always look at equities as [if] we’re investing in a business, either 1% or 100%, but we’re looking at the business, we’re looking at the economic prospects of that business, how sustainable it is, and what it will look like ten years from now. And is our capital… the capital we originally put in at exponential risk, or where’s that risk? Set that profile. And then, of course, and then we’ll obviously continue to always put excess cash in the safest investment there is in US Treasuries, knowing we want to maintain that fortress of a balance sheet for two reasons. One, to act, but also to always protect our shareholders if we have a… We want to maintain the position Berkshire is in now, realistically for the… To ensure it, to ensure it endures.

Pabrai made some comments on a recent podcast about Ted Weschler that aren't remotely close to being true. He said that Weschler was down 70% in the 2007-2009 period and was 30 points behind the S&P in those years and that his track record looked horrible when Berkshire hired him. See link/quotes below. Here are Weschler's returns at Peninsula vs. S&P from 2006-2011, with cumulative 2007-2009 results vs. S&P broken down. Even if you look at the intra-quarter numbers, the absolute worst drawdown for Peninsula was 50% from 2007 Q4 to 2008 Q4 and S&P in that period was -41%, so not within a mile of lagging by 30 points. Also, over the 3 year period mentioned, Peninsula was up 32.7% and S&P was down 15.9%. Peninsula was above its high-water mark from 2007 Q3 by 2009 Q3. The story here was that Weschler had horrendous returns relative to S&P so that other managers who have had similar horrendous returns over multi-year periods can in fact be wonderful investors. Except the story isn't true. https://www.theinvestorspodcast.com/episodes/investing-and-life-lessons-w-mohnish-pabrai/ [01:02:25] Mohnish Pabrai: Well, I would just like to point out something that when Ted Wexler was being hired by Berkshire Hathaway, I think he joined in 2010, thereabouts. I think around then, and maybe a little bit later, but in the 2007 to 2009 time period, he was down more than 70%. So they hired a guy who, when they looked at the recent past before they hired him, it looked horrible. [01:02:57] Mohnish Pabrai: The numbers looked horrible. He was 30 points behind the S&P in those years, but they still hired him because they looked kind of past, they looked at the kind of longer term record and went with that. So I think the thing is that when we look at someone like, let’s say Steve Bomber, you know, there, there’ve been three CEOs at Microsoft, and I talked to some Microsoft investors who hate the period of owning the stock when Steve Bomber was CEO, but it really wasn’t fully Steve Bomber’s fault. [01:03:34] Mohnish Pabrai: He came in when the stock was ridiculously overvalued and he left when it was ridiculously undervalued. And then Satya comes in with an undervalued company and he hit her out of the park. So, I mean, he created a lot of value, but he was, his starting point was a value stock. And so we can get a lot of distortions even looking at 10 year periods because of this notion, because you know, markets can be very overvalued. [01:04:03] Mohnish Pabrai: So I would say that anyone, when they’re compared to the S&P in the last decade is going to not be looking great because the S&P is coming off in incredible tenures. But the next 10 years, a lot of yo-yos will probably beat the S&P. Okay. Because it’s so elevated. So I think the selection of an investment manager is one of the most difficult things to do. Very hard to do.

An interesting tension with Buffett/Berkshire is that he has long talked about how size is the enemy of performance in investing, yet he refused to repurchase shares until only the last few years. This would have shrunken the size of the company and lengthened the runway for outperformance. He knew this and also encouraged management of other public companies, including the ones he owned, to do so. I think if you pumped him with sodium pentothal he would acknowledge this and that he really just wanted to see how big he could make Berkshire in his lifetime.

Mclane was such a good deal, the kind that Berkshire used to make more frequently but that have dried up over time. They paid $1.427 billion in 2003 and it has since produced over $4b in FCF with net income around $480 million in 2024 ($634 million pretax earnings). The IRR is about 13%, unlevered.

From the numbers posted higher in the thread, since the start of 2020, S&P has returned 89% and Pabrai's fund is down 6%. How do you get him outperforming the S&P in the last 5 years? You spend a paragraph saying that he is hugely concentrated, his biggest position is down 50-60%, but if you assume that position goes up a lot then his numbers will be better. That is true, but also, anyone will outperform if you assume that their investments will outperform, even though the historical record is that they have underperformed. On the Munger stuff, people weren't saying that Munger not giving him money was some kind of negative sign, they were responding to a Twitter post saying that Munger had given him money to invest when that was not true. What I find odd is that there is a lot of stuff on Twitter making claims about Pabrai that are not true - like that Munger has given him money or that he has some outrageously good historical returns or that he is a billionaire - and he sometimes retweets the posts. That's highly unusual behavior.

This post from Twitter in early 2024 says his stake in his funds was $43 million, so even if he had a big 2024 he's probably in the neighborhood of $60 million. The Reysas positions are in the fund so already included there. He got divorced sometime after 2017 (he has mentioned in interviews) so that may have taken out a chunk. Regardless, he's a country mile from being a billionaire. I can't imagine being interviewed by someone who I knew was going to post it publicly calling me a billionaire in the title if it wasn't remotely close to being true. It's the kind of behavior of someone who is trying to create/maintain a public image that is much rosier than reality. https://x.com/harrybottle3/status/1793998412385558944

If you click through to the source, this is the translation. It may be that it's the continutation of the parent fund under a different subadvisor. https://www.fundsquare.net/download/dl?siteId=FSQ&v=z/++Edz7f+o41gGTsQ+Xlw+2RSBLIs+ixhWVZOgdnx6z4a5utCf2b31BECHPKx/s5Kqquik+MV5PWuEMtPKee/vkrzFsEsnYQBha1c/4LGo2u8EXokliOEVZRlbgTyPY MercLin II SICAV Investment company with variable capital under Luxembourg law Head office: 12, Rue Eugène Ruppert, L - 2453 Luxembourg Luxembourg R.C.S. No. B-150.351 the “SICAV” NOTICE TO SHAREHOLDERS The shareholders of the SICAV are informed that the investment advisory contract binding Manager of the SICAV (MERCIER VANDERLINDEN ASSET MANAGEMENT) and the Advisor in Investments (Arlington Value Capital, L.L.C.) was terminated effective April 1, 2020. Shareholders are also informed that the Commission of the Advisor in Investments has no longer been paid by the SICAV since April 1, 2020. The current prospectus, the key investor information documents (Key Investor Information Documents, “KIID”), the annual reports and the semi-annual reports of the SICAV are available in French and Dutch free of charge on request at the head office of the SICAV and in Belgium at Banque Degroof Petercam S.A. 44, Rue de l’Industrie, B-1040 Brussels, acting as financial services provider in Belgium for the SICAV. The share price is published in Belgium in L’Echo and De Tijd and can be obtained on written request to Banque Degroof Petercam Luxembourg S.A., 12 rue Eugène Ruppert, L-2453 Luxembourg. The Board of Directors

I have used IBKR for years and do all my trading on the mobile app, I find it very easy to use. Occassionally, I will use the web portal for reporting, which is straightforward. Contrary to much of what I hear, I have also found customer service there to be very good. It's easy to get someone on the phone and they usually deal with the issue promptly. I have had some tax reporting issues on some more complicated stuff, but I don't think that would be easier or handled better elsewhere.