John Hjorth
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Posts posted by John Hjorth
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Bought my first Fairfax shares
Just bought my first Fairfax shares also. Are we suppose to get a free t-shit or something? :D
lol! - It's good with some humor! At least you get a "Welcome to the Club!" from me, also for kab60! - I hope both of you do well with Fairfax!
[-Out of pure self interest also, that is ...].
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Started a small position in C today.
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I'm soo bored right now. The figures on my monitors right now tell me I'm good at investing - which I know I'm not.
The cash is burning in my left pocket - so instead of just moving it to the right pocket I bought some C and moved the residual to the right.
I - simply put - hate this bank, based on hindsight bias.
I looked at it the first time back in 2013 [just after I joined CoBF], and I just got so appalled about what I saw then. Enormous salaries and bonuses to the then management for basically running the bank into the ditch under [before?] the GFC. Then, I bought some BAC instead, that I still own.
In the spring of 2014, I looked at C again, ended up still holding my nose. I ended up buying some WFC shares instead, that I still own.
I get dizzy reading about the ongoing litigation against the bank, and it's still nagging me, if the loan book is actually cleaned up now, meaning: No more sceletons to come out of the closet.
For me, there will be no averaging down in this stock - perhaps I will even in the near future put a stop-loss on it, and just walk away from it, if it goes south, licking my wounds afterwards.
I'm just trying to learn something about my self here, and trying to get some kind of return on some cash that is actually pulling zero otherwise, based on a personal and subjective judgement of the facts right now with regard to the overall situation of the bank and its prospects going forward, posted by Viking in the investment forum in the C topic.
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Thank you to Viking for sharing recent thoughts about C here on CoBF.
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Thank you for sharing your knowledge with a past and present perspective here, rb. It is very much appreciated.
In that perspective, it makes a least some kind of sense.
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I read this board every day, thus I learn something every day!
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Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.
There is no way in hell this will happen but the hole fiasco around it is kind of insane.
nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.
If it comes to that extreme eventually, Berkshire will just sell those Texas dealerships again, like what happened with about 2 km railroad at BNSF a few years ago.
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Thanks for the reminder.
For BH now, numbers are really big.
My comment also had to do with our own individual assessments of specific circumstances versus leverage and opportunity set.
Mr. Buffett is the Master.
As individuals, we adapt (try to) to circumstances which are fluid.
From my perspective, in 2007, I had zero investment leverage or otherwise. In 2008-9, I had a lot.
And now it feels like 2007. Maybe it's all bias.
I have looked at recreational properties around my area. The price to value is in correlation to all assets in general.
Maybe, it's all because of low interest rates.
But I wouldn't bet on it.
Yes Cigarbutt,
At that time [1971], Berkshire was "mixed bolts": A really crappy textile business [in clear hindsight], NICO bought about 4 years earlier at about USD 8.6 M [better than gold in clear hindsight, statutory policy holders' surplus at end of september 2016 USD 92,147,890,603 - why does that page not get a quarterly update? - I suppose the figure is so large, that nobody bother to update it any longer?], and a bank, that later got spun off.
Mr. Buffett was actually levering up, using that mortgage to get more skin in his own game.
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So CoBF devolved into a forum of FANG-hate and backslapping based on 2 days of market behavior.
Can the last serious investor turn off the light please?
Valuehalla,
Why are you charting this? - and why are you posting about that here?
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Situation in 2007 versus now?
There are parallels and there are differences.
Then?, "past performance indicative of future results". ;)
You need to keep in mind the context of this action from Mr. Buffett. This was about a recreacional house. What was his net worth at time?
Back to now: Please read from page 34 and onwards.
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The history of the world ended already with FANG. And there's more, TSLA, Uber etc. They have won and are about to take it all. They are coming after my money also.
The future ain't what it used to be. Yogi Berra
It's actually good with some humor on the board at these market levels! : - )
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I have now read some of the chapters in this book in the weekend. I've been "jumping around" in the book, because I think every chapter can be read separately, as a "separate, tiny book/story".
Ms. Schroeder is to me a very good writer. She goes much more in depth on some stories & themes about Berkshire and Mr. Buffett, that I have read about before, but not for me other places described in such depth before. Naturally this is the outcome of having direct access to the man that the book is about.
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On a more personal - and thereby subjective - note from me [perhaps this has some cultural dimension also, I don't know]: To me, this book contains information about some events involving Mr. Buffett's first wife and what happened to her in her last years before her death, that to me do not belong in a book - not even a biography - about Mr. Buffett.
Those descriptions - I have duly noted - are mostly without notes and sources [elsewhere, the book is filled with a lot of notes and sources], and I was thinking while readin it: "How did Ms. Schroeder get this information?" - and more important: "Why did she publish it as it as written in the book?".
That to me crosses every line; ethical, fairness, whatever. To think this book would pass off as a biography of sorts, of a person who is still living is insane. While she makes money off of it, the only reason for the money being made is the name "Buffett" in the title! Shameful.
I was happy to watch the other movie about his life.
Thank you, longinvestor.
+1. Exactly: plain shameful.
I know there are lot a good persons on this board, one can actually sense it, after reading the board over the years. It's comforting, that you step up.
Ms. Schroeder was actually one of the very few persons at the time of the publishing of the book, that knew all details of those events, and also knew what this did to Mr. Buffett at that time. I can imagine what it would do to him reading book, thereby experiencing the whole thing again, and at the same time knowing, that now this would be available to all, who would pay for the book.
Mr. Buffets mourning at that time is the mere confirmation that he married the right person for him. The personal feeling of the loss is the positive confirmation of, that the person has lost something very valuable to the person, here the end of a relationship to a person very near and dear. Mourning is a process of inverting.
The Golden Rule comes to mind here.
I sure understand that Mr. Buffett has put Ms. Schroeder on ice.
If I had known that I would read such kind of stuff in the book, I would have got it at the local library, and delivered it back after reading. That's sure.
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I have now read some of the chapters in this book in the weekend. I've been "jumping around" in the book, because I think every chapter can be read separately, as a "separate, tiny book/story".
Ms. Schroeder is to me a very good writer. She goes much more in depth on some stories & themes about Berkshire and Mr. Buffett, that I have read about before, but not for me other places described in such depth before. Naturally this is the outcome of having direct access to the man that the book is about.
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On a more personal - and thereby subjective - note from me [perhaps this has some cultural dimension also, I don't know]: To me, this book contains information about some events involving Mr. Buffett's first wife and what happened to her in her last years before her death, that to me do not belong in a book - not even a biography - about Mr. Buffett.
Those descriptions - I have duly noted - are mostly without notes and sources [elsewhere, the book is filled with a lot of notes and sources], and I was thinking while readin it: "How did Ms. Schroeder get this information?" - and more important: "Why did she publish it as it as written in the book?".
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Just to give some perspective to the post by WneverLOOSE. From the 2015Q1 interim report :
In the first quarter of 2015, Berkshire acquired controlling interest of the Van Tuyl Group. The Van Tuyl Group (now named Bekshire Hathaway Automotive) includes 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto ucations and a manufacturer of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire Hathaway Automotive group offers repair and other services and products, including extended warranty services and other automotive protection plans.So, as WneverLoose wrote, this will not move the needle as such for Berkshire, but certainly for the Van Tuyl aquisition, this might be considered something material, that has skipped the attention of the involved parties.
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It's beyond my comprehention, why there in Texas is legal protection of car dealerships against competition from car producers trying to compete by selling cars B2C.
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UK election: shock as blue-blooded Kensigton turns red.
"It's bizarre!" exclaimed an older gentleman, pottering around a mews lined with flower pots on Friday afternoon. "He's a communist - and the other chap's a Marxist."He was referring to Jeremy Corbin, the avowedly socialist Labour leader, and his deputy, trade unionist John McDonnel.
Hilarious.
Two recounts of votes be sure - Nobody believed it.
Interesting times.
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You may like:
http://www.etf.com/etfanalytics/etf-fund-flows-tool
https://www.ici.org/research/stats
And relevant/interesting comments by Mr. Ed Yardeni with a possible link with the FAANGs.
http://blog.yardeni.com/2017/06/hannibal-spirits-s-500-climbing.html
If you want to know, in terms of strategy, I think that Fabius was the real hero in the second Punic War against Hannibal. (Who cares?) The strategy of opportunistic attrition has been applied repeatedly ie British victory over the Spanish Armada, Napoléon's defeat in Russia, the guerilla in Vietnam and many others. The link with investing could be to not fight the Fed or bet on momentum. I like patience and opportunism.
Thank you a lot for taking the time to shed some light on my question, Cigarbutt. It's much appreciated. I'll take it from there.
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Does any of my fellow board members have any idea of statistics to watch overall capital in- & outflow to & from ETFs? -Thank you in advance.
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Based on your last post, I coulden't resist ordering the book, longinvestor.
There was apparently some back log on it at Amazon, but I got confirmation today, that it has now been shipped.
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Off topic:
It's about keeping my purchase impulses in check, pure diversion by buying books, instead of stocks. It's starting to get costly, actually.
The Lady of the House is shaking her head over all those books coming in. Then I start talking about that what I'm doing is actually building a margin of safety against going down on and running out of unread books.
[Actually, I still have some reading "work in progress" with "Of permanent Value" by Mr. Kilpatrick and "Snowball" by Ms. Schroeder right now, perhaps in the area of reading through 3 kgs of pages - and she knows that ... - then she shakes her head again : - ) ]
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Finally received the book today. The quality of the book - as such, as a book - leaves a lot behind, being a book - as such. Poor page cutting etc.
The printing craftmanship is to me just secunda quality. I look forward to the reading, though. I hope the contents conpensate for the overall state of the physical book as such.
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Bump.
I have been thinking quite some about this lately. I would really like, if we could pick up this discussion again, based on recent conditions. How do you perceive the situation now etc.?
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Distressed debt investing & distressed assets investing is not about making new friends, like "I want to work with people whom I like and admire". It's simply just another game.
It's more like: "You are in need of oxygen?" Answer: "Yes, pleaase!" Answer back: "OK - here you go - ... but it'll cost you all your underwear - new and used!"
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Thanks for sharing the Bogle interview, Sanjeev!
I still think a lot about this topic.
The one thing I've learned is that you will never have any idea where the "bottom" or "capitulation" is.
... What I don't think anyone really expected, and probably not even Prem, was just the sheer collapse in the credit markets. I think Prem expected spreads to widen dramatically and significant tightening to occur. But the seizing of the markets the way they did...I don't think anyone expected that. After that, I think pessimism took a stranglehold to the planet, and fear became rampant.
The one thing we do know is that once fear becomes rampant, usually the least likely scenario, in this case optimism, is probably more likely the correct assumption. But it takes time to prove this theory correct. It doesn't happen overnight. Just like it took Prem a couple of years to be correct on the downside, it will take a couple of years for Buffett to be correct on the upside. Cheers!
So one thing is to be prepared for such a situation - the other thing is to play it right ... - to take advantage of such market situation.
- To me, the second part is like: "How the heck do you that?!", based on what Sanjeev posted then back in February '09... - most likely, time will tell! [-and that is for sure no kind of guarantee, that I will end up having played it right!].
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The situation for me has been, that I still - on overall family level - held quite some cash, untill the end of March this year, where a large cash pile ended up in the lap of the Lady of the House, as the major enheritance for her from the MIL estate. I only need to finish a transfer of the MIL stock portfolio, do a tax return for 2016 for the late MIL and the estate for 2017 when it is fully processed, and some reporting to the probate court about the estate, for calculation of final inheritance tax, the cash for the inheritance tax, court fees etc. still in place in the estate, plus a cash buffer.
Honestly, it has almost been hauting me during April this year, how to proceed with the capital allocation for the Lady of the House going forward, at these market levels.
It is not "only" a cash pile and stock portfolio, it is basically the whole inheritance belonging to the Lady of the House, after her parents - the whole economic output of what her parents have generated [net] during two whole lives, including a small part inherited from their parents ... - it's not the time for me for making mistakes!
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Here is what I have come up with so far, personally:
1. Occam's razor: Keep it simple.
And accept the opportunity cost of keeping it simple and clear: Accept the material increased overall cash level, and do not go on a shopping spree. It is in the situation much more important to preserve the capital than to get it to grow at a satisfactory clip.
I have pushed the cash up in the high interest account of the Lady of House at the Danish branch of the Norwegian SAN SCF sub, where it is right now pulling 0.9 per cent per year, allocating it to stocks right now - at these market levels - going forward in small drips over the next few years [4 to 5 years], with the opportunity to buy much more, when we end up in a downturn ["when", because we will - it's just a matter of time].
2. Identify the antifragile companies in the portfolio, and be prepared to load up on these in a downturn, and perhaps start selling the fragile ones now.
Antifragile:
a. Berkshire : From this angle, Berkshire seems to be a no brainer. I'll just continue to buy it in small drips, from now, and going forward.
b. Investor AB, Sweden [iNVE A.STO] : The company has a commited and idle credit line of SEK 50 B from a consortium of banks - with no covenants. I feel confident, based on experience, that this company will play its hand right in such situation.
c. Schouw & Co. A/S, Denmark [sCHO.CPH] : I feel confident this company will try to take advantage of such a situation also, based on a large economic aquisition capacity right now [in the area of DKK 2 B], despite it has a lot to do right now with already made aquisitions.
Fragile:
d. Banks, in general [without having any clue to what extent]. For me, it's about primarily the SAN position.
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Thanks. I meant more as being so specific about 1.2 book value. Wouldn't it make more sense to say something along the lines of "Berkshire will repurchase when shares are significant discount to intrinsic value."
I think a lot of companies have policies where they repurchase when shares are at extreme discount to value (I assume), but they never set the repurchase threshold. If it's to make it clear to shareholders, then setting the discount % from intrinsic value that triggers repurchase makes much more sense than 1.2x book, no? From 2011 to 2012, the threshold went from 1.1 to 1.2, yet since 2012 there's no increase? Especially with the view that intrinsic value has increased at a greater rate than book value increase?
Unless there are extreme crisis, there's going to be no repurchase, right? So ... that also ties the hand of future management, no? I think future management can fend for themselves, but it just seems so unnecessary. If buyback or dividends are rationale, sensible decisions why leave it to the successor to initiate it.
villainx,
To me, it is plain and pure Buffett logic, because Buffett long ago defined the rough estimate of the economic progress of Berkshire as the change in book value per share year by year.
Please also note the particular circumstances, that was ruling when the buy back treshold was raised from 1.1 x BV to 1.2 X BV. It was about buying back a large block of A shares [9,200 A shares] from the estate of an early [long term] Berkshire investor.
longinvestor has mentioned this before here on CoBF. How many early - and very rich, by holding on to the stock through thick and thin -, now still alive and at high age - Berkshire investors are there out there, what size are those individual "non float" blocks, and what will happen, when they come in play? [At least some of them will most likely come in play, because some capital gain taxes has to be paid, even if the shares are mainly distributed to inheritants, I suppose].
The alternative to a Berkshire buy back in such situation would most likely be a large conversion to B shares and a sale in the market of those B shares over a certain period, if Berkshire would not be willing to buy such A shares back near at that time ruling market price for the A.
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SlowAppreciation,
Also thank you very much from me for sharing your piece. I have read it today. It's a great write-up.
At these market levels in the US, Berskhire is certainly a buy, compared to so much else, with S&P 500 at about a P/E ~ 25.
It actually made me check a few things today also: I haven't bought any North American stocks since 2015, with three exemptions:
1. Berkshire - quite some,
2. Markel - to fully build the long term position for the Lady of the House, in the autumn of 2016,
3. Fairfax - to fully build the long term position for the Lady of the House, in the autumn of 2016.
Berkshire is priced right now in the area of ~1.4 x BV. At these levels, I'll just continue to buy going forward, in small drips.
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There is a Youtube clip a bit down on the page. It is in English language, actually. To me absolutely worth your time, if you have just some interest in this topic.
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More than one day and night has passed - still no reply ...
I appreciate that you bring this topic up, longinvestor.
It's complicated - very complicated - basically it's out of of my circle competence.
So I'll just post some thoughts here - without considering it even a stab on the topic in mention.
Since I read the 50th year anniversary shareholder letters from Mr. Buffett and Mr. Munger about the future of Berkshire, my thoughts has been circling around this topic, constantly - on/off.
The point here is, - what you mentioned from the Berskhire 2017 AGM session about how Mr. Buffett and Mr. Munger responded to this topic is - at least to me - in reality, that both those gentlemen don't really have a deep knowledge about it. They are "only" capital allocators - very good ones over time - what they say at the Berskhire AGM's are simply just hear-say, from the CEOs of the subs - but still very important - based on trust on the CEO of the subs and their information flow from the CEOs of the subs.
So in short - the CEOs of the subs simply has to get this right going forward in the long term - it would be potentially nothing less than crippling to me and my familys living conditions going forward otherwise.
And please do not ever forget: You can fire Mr. Buffet and Mr. Munger as your capital allocators whatever day the NYSE is open. Mr. Buffett and Mr. Munger are stuck with whatever wholly owned subs they have bought on behalf of Berkshire, and have to get the best out it, be it not a total disaster.
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No vote from me on the poll.
The Essays of Racemize
in General Discussion
Posted
During the years, our active fellow CoBF board member Racemize [Joel Stevens] has been so kind to share his essays here on the board on a continuing basis, based on some Dropbox links by Joel.
Personally, I have read them all - and, actually, I hold them high.
I suppose we all have our favorites and "anchors" with regard to reading. Personally, I define an "anchor" as a "piece" [book, essay, article, whatever] that I go back to, to set myself self straight, to get back on the track with my line of thinking, when my thoughts starts straying, and I end up more or less confused and unable to think straight.
To succeed, you first have to finish. You have to have a perception of where you are, and where you are headed going forward, to cross the finish line with a good result - the finish line, that is always moving away from you in the horizon relative to your own position - just like a rainbow.
To navigate, you need to have perception of where you are, otherwise you "grab the anchor". It's like turning on the GPS in your car to get it to find your actual location before you tell it where you are headed, after which the GPS is guiding you, if you are on a route not yet known and familiar, or if you have got lost somewhere.
Recently, I needed to go back to one of Joels essays, and I found out that I have not downloaded it from here [Dropbox link by Joel]. I managed to find it anyway on the Net. After the worst panic evaporated after getting that particular essay anyway, I did send send a CoBF PM to Joel to express my appreciation for sharing the work.
It turned out, that Joel actually really appreciated the positive feedback from me, because Joel actually does not get much feedback on his writings. I also mentioned the dead Dropbox links for Joel. Joel wrote to me, that his Dropbox account got banned, because some [dumb] Twitter user linked to the Dropbox link [on Twitter] - so much thanks for sharing!
Anyway, for all my fellow board members ex. Joel, here is a link to Joels essays, now that the Dropbox links on this board are dead.
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To Joel:
A sincere thank you for sharing you work!
To all other board members than Joel:
Enjoy! - If you do not already have them and have read them. Furthermore, perhaps it would not harm to post a couple of lines in this topic, if you like them ... -Perhaps we then get access to more work by Joel going forward!
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Disclosure: No skin in the game at the fund Joel is running - I just happen to like and appreciate Joels essays.