John Hjorth
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Posts posted by John Hjorth
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Thanks a lot for sharing this, alwaysinvert.
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alwaysinvert,
Based on what you wrote earlier in this topic about the 10 per cent treshold I have tried to follow all links in the tax guidance from Skatteverket to see if I could find anything about it. I was without luck.
But I did find this in Annual Report 2015 for Industrivärden AB on p. 53:
... that capital gains on sales of stocks are tax exempt, but in return, a standardized level of income, which amounts to 1.5% of the market value of the equities portfolio at the start of the fiscal year, is taxed. The basis for calculating the standardized level of income does not include businessrelated shares, by which is meant unlisted shares as well as listed shares in which the holding corresponds to at least 10% of the number of votes. In order for listed business-related shares to be excluded from the standardized income calculation, they must have been held for at least one year.I suppose the written there is correct, despite I can't find it in the tax guidance from Skatteverket. So I suppose there is a difference in the tax treatment of investees with regard to standardized income, based on at least 10 per cent voting power in the investee or not.
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globalfinancepartners,
The headline of the article is actually to some extent misleading, because it does not indicate, that the proposal was turned down, but that is mentioned in the article. And yes, depending on the structure, this could really move the needle for BRK.
I also find the article interesting, because the content of the article gives some indication of, what's passing the desks of Mr. Buffett and Mr. Munger of potential stuff. This is [was?] huge.
This could not take place without the involvement of both BRK at top level and the 3G people. Those 3G people are really into the space of huge deals now.
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I think you are right, rb.
BRK is gradually morphing - as it has done in the last 50+ years. :-)
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Great read! - Thanks for sharing, bookie71.
This is one of those good stories - very impressive - that does not hit the press here.
With regard to Mr. Buffetts health: I can't image, that there will ever come a situation, where the BRK board shows him the door, as Mr. Buffett him self called it in a shareholder letter some years ago.
It's about generally beeing fit and proper for the job - all included, also health. When your body gradually starts quitting on you because of age, even the most basic acts might start getting cumbersome and time consuming compared to earlier in life. His hearing is in decline, he does not try to keep it a secret. So, likely his ability to communicate orally will be affected going forward.
I have noticed that people of high age - perhaps it's just a local phenomen, I don't know - want to spend more time with family in general. Perhaps Mr. Buffett has such considerations - pure speculation from my side.
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Thank you for sharing your insights here, alwaysinvert.
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Jurgis,
I had to look up the US tax concept of a PFIC. It seems hairy to me. For my part, this is not an issue to give attention. For me, these Swedish investment conglomerates - as long as they are corporations - get "ordinary Danish tax treament" [in both taxable and tax deferred acounts].
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By the way, in addition to number of owners (there have precedent setting supreme court rulings that 80 was not enough but 740 was, the real threshold is unknown) you need to have either 10% voting power of listed companies or stocks in unlisted companies to qualify, while also being diversified. An investment company also needs to have holding stocks as its primary function, as opposed to trading (free translation from Swedish legalese). Whatever that means in actuality.
alwaysinvert,
From your post I get the sense that the Swedish tax regime is like here in many respects: Overall rules with a lot of lacking specifics, and the practice actually just materialize over time - by litigation - by court decisions up through the court/complaint system. Certainly not pretty by any measure, and a very expensive way to establish a tax practice, the only parties involved in that getting satisfied are tax lawyers, getting paid dearly. Actually over time getting paid to establish a practice, in a legal battle with the Swedish IRS [called in Swedish: "Skatteverket"].
What's your basis for what you have written about the rule existing about holding at least 10 per cent of the votes on each investee? I can't see that mentioned in what I've linked to prior in this topic. - Perhaps something here just has skipped my attention.
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I'm already invested in Investor AB, L. E. Lundberg Företagen AB & Industrivärden AB - small positions, Investor AB beeing the largest, at about 3%. And yes, ref. alwaysinvert, there are similarities - to some extent, but when you dive into them, they are not - actually, not at all - similar.
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To me mentally, these positions are competing with SCHO.CPH inside the portfolios.
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I expect over time to open separate topics for each in the investment ideas forum, if I choose to invest in the thing on my list [or already invested in it], otherwise I will just post my findings & conclusions - in short - max. 10 - 15 lines - in this topic.
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Just don't ever "@" Mr. Pabrai, if you want to be able to read his tweets going forwards. Just saying ; - )
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... That will get me out of my ennui.
:-) In a few days there will be the 13F-HR to study and talk about on here. Digesting a few Howard Mark's memos and thinking about their contents also helps to get out of some kind of feeling of missery, or boredom while waiting - diversion of the mind, based on placebo... It works for me. I also use the Semper Augustus client letter that way - less placebo, more BRK.
Beeing invested in BRK long term actually screews up your hierarchy of needs.
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Thanks for the large contribution to my list, alwaysinvert!, - it's very much appreciated.
Also thank you for your information and comments including your view on these kinds of investments at the moment. Actually, I'm having trouble valuing some of these companies and comparing them, because of different structures, generating different reporting structures caused by accounting conventions. [wholly owned investments vs. partly owned investments [listed/not listed].
I'm trying to make them comparable on some basic metrics and to decide on position size of each position of them in a basket, build the basket over some time, and then just basically sit on it long term, as a starting point [,meaning, always subject to that I may change my mind going forward, both with regard to basket size and individual position size].
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Great question, wachtwoord,
After thinking a bit about it: The reasons are several, and the common denominator for them are: Lack of mental flexibility, most likely geriatric based. My tent pegs are just hammered in the Danish soil, so they are stuck. Too lazy, too comfortable.
Actually, I haven't moved my butt for more than 32 years now.
They also speak so strange over there. It would in one way actually be like moving home. My grandfather on my fathers side was Swedish, and moved to the small Danish island Bornholm in the Baltic Sea from Skåne while young. On Bornholm, they also speak weird, language close to Swedish, more Swedish-like than Danish-like. I get reminded about it every time the old man gets angry, excited or eager.
I would like to move south in retirement though - I hate Danish winters. The Lady of the House won't hear talk about all this. I call my self her AUM, when we have disagreements.
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Scott,
These investment companies are in Sweden taxed, so that the company is basically not taxed, but the shareholders only, and instead, are taxed, to avoid double taxation.
The mechanics in the tax computation goes like this:
Basis for taxation for the company is a standardized income, which calculation basis is the market value of investments at the beginning of the year minus the value of what by Swedish tax law is defined as "business-related shares".
That calculation basis carries a standardized income of 1.5%. To that calculated standardized income the company has to add dividends received from investments, and the investment company can deduct management cost [basically the most of the costs related to running the investment company, net financial expenses etc. [the most of these companies uses leverage to a modest extent], AND dividends paid out to shareholders.
The best way to get a feeling of the tax mechanism for such a Swedish company is to study the financials for Industrivärden AB. Just visit the website, switch to "English" by pressing that button on top of front page, grab the 2015 financials for the company, and study the tax note [note 8 on p. 45]. [industrivärden is in this respect "totally clean", because it has no wholly owned investments. The tax mechanism gets "burried" in the tax notes for the investment company, if there are wholly owned investments subject to joint taxation with the investment company, like in Investor AB and L. E. Lundbergföretagen AB.]
Industrivärden has made good money in recent years, despite that fact it has a tax loss to carry forward of SEK 7.054 B at the end of 2015.
So, in short, such a Swedish company can actually roll in and out of positions without incurring taxes on capital gains [and also not get deductions for losses on positions, if some investments goes south].
Such a Swedish company can actually hoard retained earnings much faster than a company not having this particular tax status, because it is not deferring taxes on unrealized capital gains on stock positions.
There are some conditions, that have to be fullfilled for a Swedish company to obtain this tax status:
1. The portfolio has to be fairly diversified.
2. The company has to have "many" shareholders.
3. The companys actual and real activity has to be almost exclusively management of securities.
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If there were such rules in place here in Denmark as part of the Danish tax regime, I would start out monday morning at 8:00 AM building such a damn thing, starting out with my own money, getting the tax status later by taking in OPM.
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Within the last few years, this kind of investment has caught my attention.
It has caught my attention for tax reasons. In short, it's to me the almost perfect investment, with regard to taxes in Danish tax deferred acounts.
Naturally one has to build some kind of conviction about what these conglomerates are actually doing - right now, and going forward - expected. That's hard work and somehow cumbersome & dull.
What I have been trying to build lately is a list, containing:
The listed Swedish companies, with regard to taxation, subject to the Swedish tax rules of an "Investment företag" In English: "Investment undertaking"[link: here.]
The listed entities so far identified by me, subject to those quite special Swedish tax rules, are:
Investor AB [iNV A STO or INV B.STO] Link.
L. E. Lundbergföretagen AB [Lund B.STO] Link.
Industrivärden AB [ INDU A.STO or INDU C.STO] Link.
Investment AB Öresund [ORES.STO] Link.
Kinnevik AB [KINV A.STO or KINV B.STO] Link.
Somewhere, on some Swedish website, a few months ago, I read, that there would be about a docen of companies with this particular status with regard to taxes mentioned above.
Which companies are the rest, that I've been so far not able to identify?
Any help on this question would be much apreciated - especially from my fellow Swedish board members on here.
Thank you in advance for any input.
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Thanks, VersaillesinNY!
[around the 14:00:00 mark or so: comments about a young school boy going rogue, shorting AT&T stocks, because he's found out most of the teachers pensions funds were invested in AT&T stock!] - This is almost killing me! - lol
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For those of us a little more commercially minded ;)
http://www.paddypower.com/bet/politics/other-politics/us-politics?ev_oc_grp_ids=2657726
I understand that supposedly 9 of the last 10 US presidents had assassination attempts on them, and that the odds on impeachment are usually around 4:1 – about the same as for assassination. Donald’s doing 4-5x that.
And ... as Paddy Power is Irish – a win would be tax free
Even the Donald would approve :D
SD
Pretty good humor, SharperDingaan! It could actually be a tweet by Mr. Taleb.
I saw a bet there, in the category "Trump Specials": "Golden shower footage to appear on RedTube". Odds appeared to be 4/1. Hilarious.
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If you add the Black Lives Matter to the list then I will fully agree with you.
Moderation and truth has to come from every side. Not just one.
Cardboard
Moderation and truce has to start to start with each of us, before we are asking it from somebody else. The board members here by large should be reasonable, non-violent people, so it should not be hard to have a civil discourse. If not, these threads should be locked.
+1 - It's actually that plain simple, as posted by Spekulatius.
I post here with my civil name - the name stated in my passport etc. - like Jurgis, Sanjeev and Eric. It's the best way for self moderation, and to stay out of trouble - for my part, at least. Jurgis, Sanjeev and Eric may have other motives, of which I have no knowledge. I respect other board members don't have this opportunity as living the lonely life of managing OPM.
Unfortunately, I'm equipped with the worst temper even imaginable from birth - My father is an old school military man, distilled to the extreme -and his genes are in me. It took me many years just to acknowledge that fact, and try to shape my own behavior accordingly, in the meantime causing so many - actually - and uncautionally - selfinduced problems, untill I ended up realizing the facts of from what I'm built, relatively late in life.
And life's got a lot easier from then going forward, in general.
In short, if something makes you go ballistic on here, - take a break - do something else - positive - on your immediate mind - and get back, when you are cooled down again.
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Ref. the question from racemize earlier in this topic,
I have to step forward - in embarassment - because I asked my self the same question about 4 - 5 years ago - and ended up stuck on the question.
Then, I found This, now even older, Gurufocus article: Lessons From Warren Buffett’s Personal Portfolio [2010.05.25].
The basis and assumptions of the article are false. What does a - former - then younger, and brain washed - Danish CPA do here? Answer: Get a fall back, and start trying to reconcile... it all! - position by position - to test, if the basis is true!... Which it is not.
Old news then still apply today. Please just take the F13/HR related to year end 2015 and try to reconcile it to AR 2015 with regard to the number of shares of KO owned by BRK. Since then, I have been stuck, with regard to the understanding of that particular column in the F13/HR. I have tried searching the edgar site, but unfortunately without luck, and ended up giving up in the end, now long time ago.
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If having too much cash is a problem, buying airline stocks has historically been a pretty good solution. ...
It's pretty good humor, Williams406! I think I'll start babling to the Lady of the House that we really need some airline stocks now - earlier I have told her, if I ever start babling about buying airlines stocks, she has to stop me! - And to be very persistent with regard to suggestion for alternatives! - Oslo, Stockholm, Paris, Berlin, or perhaps even Hawaii, - here we come!
[i call it an "inverted Garfield" - after the Cartoon Cat Garfield]
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James, thank you for sharing BAM's remarks on cash. I have read it before a few months ago, but forgot about it. It's certainly worth a print.
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..., but this is not constructive.
I'm with no_free_luch here. To me, [by that phrase I mean: It's not for discussion on this board, how I perceive this topic], it's just [yet another] political board spam topic.
Let's all go back to discuss investing.
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Added a bit to SCHO.CPH today.
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don't you - as investor - have anythings else to do?
Perhaps you should ask this question to couple CEOs who post on this thread. ;D
Edit: Although we are all "grown ups" here, IMHO, political threads are toxic for communities like this. I've seen investment communities destroyed by political threads before. I have asked Sanjeev to consider not allowing political threads. His choice was to allow them ... and I respect it. But, yeah, political threads are mostly a sewer and your comments/questions are well given.
Peace.
Jurgis,
Thanks, and peace, taken with a *high five*.
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All participants in this topic,
I suppose you aren't all invested in cash or cash equivalents, with no intention to change that [meaning: If so, why are you even a board member here?].
A fellow baord member posted a few days ago, that this board has turned from an investing board to a political board. It's certainly not for me to decide what to post on this board - the board as set up by Sanjeev many years ago contains a lot of freedom for board members with regard to posting.
Sanjeev asked two very specific questions as the OP in this topic, which were clearly investment related, -however, to some extent, political.
In some of the last posts in this topic I now read things about China many years ago ...
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In short : Not trying to be condecending here, or even patronizing ... - but don't you - as investor - have anythings else to do? - Something that you have thought about with regard to an investment, that would be worth sharing with your fellow board members on here? As investor., there is always things to do... - the to do list is about endless, unless you suffer from investment burnout!
Also, in short: You are all missed - to some extent - some more, some less - in the investment forum topics! I always appreciate investment input from fellow board members!
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Thanks for reading my grumbling rant.
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I bought more Berkshire B shares today. Business results should be very good.
Too much of a good thing can be wonderful. :)
Charlie,
Yes, to me also, BRK is still a buy - at these levels.
Swedish investment conglomerates
in General Discussion
Posted
Thanks, NewbieD!,
Yes, it's fun to investigate, but somehow also very cumbersome, and time consuming.
Somehow, these Swedish tax regulations in this area for investments undertakings - at least to me - seem to be very attractive. For me and my family, as far as I know - so far -, there is no Danish way to circumvent/defer capital gain taxes on realized stock gains, except by doing this kind of investment, if you're not buing to hold forever.
What I'm actually thinking about here, is: "If I bought a basket - so to say - "directly" - to "mirror" i.e. Industrivärden AB portfolio, what would the taxes be on such an arrangement, going forward - long term? [Even without the HQ overhead].
My own life expectancy is 23.59 years.
The life expectancy of the Lady of the House is 21.53 years.
For me, there is no way directly to compete with this tax arrangement - measured after tax - by i.e. Industrivärden AB or Investor AB - doing their investment moves, without incurring the capital gain taxes, unless I think I can do much better by doing the investments directly.
I do not live in some kind of delusion, that I'm better at this - long term - than i.e. the Wallenbergs or Fredrik Lundberg.
So, it's - for me - all about trying to weed out - and finding the good ones - among the Swedish investment companies subject to these particular rules.