John Hjorth
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Posts posted by John Hjorth
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Here's What Buffett Wouldn't Do, and Maybe You Shouldn't Either
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"We'll probably borrow about $10 billion and use about $23 billion of our cash," Buffett said.
http://www.cnbc.com/2015/08/10/warren-buffett-precision-deal-very-high-multiple.html
valueinvesting,
Thank you for the link above.
The reason also I asked the question was that I see no borrowing activity for BH Finance Corp. at the BRK website, in the SEC filing section. I suppose it must be a bank loan then.
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In the last couple of weeks I have tried find some information about the financing of the PCP deal, so far unfortunately without luck.
I suppose all former PCP shareholders by now have received cash for their PCP shares according to the merger agreement.
I remember seeing a Youtube video linked to from this board, where Mr. Buffett mentioned that a part of the acquisition plan [most likely - I do not recall the exactly verbal expression from Mr. Buffett in the video] was to take on some leverage for BRK.
Any insights and sources on this matter from my fellow board members would be much appreciated.
Thank you in advance.
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When Seth Klarman was once asked how he was able to maintain outsized returns despite such a large cash position in his portfolio, he explained that it was precisely because of his cash position that he was able to outperform.
dabuff,
Do you have a source for that statement?
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... That said, if you don't see bargains, you don't see bargains.
blainehodder,
Fair enough statement here from you. Certainly it depends on personal investment style, and also work process. I'm just not a macro guy, and perhaps the topic title to me indicated - at least indirectly - possible efforts of market timing. If I have stepped on the toes af any posters in this topic, I hereby apologize.
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Thanks for this book link. I didn't know about this and it will go on the to buy list.
Glavacem,
You are welcome.
I ordered my copy of the reprint in the beginning of December 2015, based on an e-mail from Max. I don't remember the exact date of arrival here, but I think it was about 2 - 3 weeks after ordering. I'm in the Northern part of Europe, and I opted for cheapest freight, with no tracking available.
I was surprised - in a positive way - by the quality of the book. It's a yellow hardcover, in a very good quality. In the last months it has become a book, that I use frequently, "napping" a more or less random shareholder letter almost every evening before going to bed - as brain food - to "sleep on".
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This topic makes absolutely no sense to me. Why aren't people buying the heck out of their best ideas these days?
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Do you guys know where I could find the best writeup for BRK? Thanks a lot :)
valuefinder,
BRK is a quite complicated group of companies, so it takes a lot of time to study up on the different parts of it, to get some kind of feeling of it as an investment.
Personally, I would suggest to start reading the financial statements available at the BRK website, including the yearly shareholder letters written by Mr. Buffett himself.
It's very informative, but also an entertaining read, though quite time consuming.
Max Olson [Max Program on this board] has created a compilation of the shareholder letters since 1965, the first one issued in 2013, a 50 years edition i 2015, and a later reprint available here :
- Enjoy! :-)
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Is there a Wells Fargo equivalent somewhere in Europe?
Svenska Handelsbanken comes to mind. But personally I wouldn't touch a bank in a NIRP environment. Nor would I touch WFC because I think the risk of NIRP in the US is significant. Much as I love Wells.
Yes, I would also mention Svenska Handelsbanken here, if any, not totally sure about it.
Please note that history of Swedish banks is quite special. Basicly the whole Swedish banking sector was in dire straits back in the beginning of the '90s. Then, The Swedish State stepped in with decisiveness, and cleaned up the mess. The Swedish banking sector therefore is much less fragmented now, compared to ie. the Danish banking sector, if I remember correctly [haven't checked the exact numbers here], but it is something like about 15 - 20 Swedish existing banks right now, compared to approximately 115 Danish banks.
The aftermath of the 08/09 FC here in Denmark was a bloody mess, which changed the national banking landscape totally, quite some [for Denmark] middle size regional banks were totally wiped out, together with a large number of small institutions. Basicly the method for cleaning up here was quite US-like. Basicly, the customers in the surviving banks "got the bill for the party".
The Swedish banks did not suffer in the same way under the 08/09 FC, I suppose based on the recapitalisation that took place many years before that, likely also based other things.
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Added today to my "probe" of LUND B.ST [L E Lundberg Företagen AB ser. B, Sweden] from the beginning of November '15 [about six fold], so that it is now about 1,2% of total portfolio.
I'll never understand making anything 1% of a portfolio.
I'm building positions over time. Most likely I'll buy more of this thing later.
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Just for info here: I just checked up on the Web and on the SAN webpage several places I thought could be relevant to look. Conclusion : So far SAN has been mute.
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I have no understanding of the strategy implemented here by 17M. I can't relate to it.
But I can relate to position sizing. Position sizing - to me - is not only about cash vs MTM values of positions measured against investment ideas at a certain point in time, to me it's also about cash vs capital already allocated to a certain investment idea [down a lot or not, or the opposite], measured as an absolute cap, measured in percent.
For every idea, to which I commit capital, while taking the initial investment, I also put on a cap [in percent] of total portfolio, to which is the max the position is to grow [,or to what I'm going to loose, if I'm totally dead wrong], based on my conviction on the idea. I may reconsider along the way on positions, but the tresholds met both downwards [max capital allocation] and upwards forces me to actually think about it.
That way of doing things makes me avoid blowing up totally. I may mess up my pants, but I walk away with messed up pants, nothing more. I don't blow up, by continuing allocating further capital to my "best idea" actually beeing my worst, like shoveling capital into a black hole.
The last part of the last 17M Blog entry seems to me like the last moves in a Chess game of a looser, ref. above.
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DB News - not in the Investor Relations section :
To me, we are approaching "VRX IR quality level" here [throwing out internal e-mails instead of doing some serious work, thereby providing some [more] - perhaps a lot of - facts relevant for the situation. - Panic?
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Desperate? No, you just have to live in a world that's been really, really fucked up by central bankers out to prove pet theories.
Petec,
I'm not entitled to reply on behalf of SharperDingaan - he is certainly capable of doing that for himself. I'll just mention here, that personally I read SharperDingaan's last post in this topic as a reference to the terms of the bonds, that DB is rumored to be buying back at the moment [most likely at a loss for the sellers], compared to buying DB preferred - at an earlier moment.
Oh so did I and I agree with everything he wrote. My point (poorly expressed perhaps) is that I see the extraordinary reaching for yield that drives demand for these daft securities (what SD referred to as desperation) as being purely down to some incredibly poor government/central bank policy.
And yes, before anyone asks, that does mean I think we need to take some deflationary (in the broad bubble sense, not the broad CPI sense) pain and central banks need to allow that.
Petec,
Thanks for elaboration, I understand your position on this now.
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Added today to my "probe" of LUND B.ST [L E Lundberg Företagen AB ser. B, Sweden] from the beginning of November '15 [about six fold], so that it is now about 1,2% of total portfolio.
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I don't know if this signals a bottom . But it's kind of funny.
Thanks
Mark
Their clients are going to start referring to them as Goldman Sucks.
Boilermaker,
You just made my day!
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Desperate? No, you just have to live in a world that's been really, really fucked up by central bankers out to prove pet theories.
Petec,
I'm not entitled to reply on behalf of SharperDingaan - he is certainly capable of doing that for himself. I'll just mention here, that personally I read SharperDingaan's last post in this topic as a reference to the terms of the bonds, that DB is rumored to be buying back at the moment [most likely at a loss for the sellers], compared to buying DB preferred - at an earlier moment.
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Deutsche Bundesbank : Europe at the crossroads
Guest contribution by François Villeroy de Galhau, Governor of the Banque de France, and Jens Weidmann, President of the Bundesbank published in Le Monde and in Süddeutschen Zeitung on 8 February 2016 :
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DB is operating at the pleasure of the Bundesbank, & the Bundesbank will not tolerate a default. DB will do whatever it is told to.
It will be a very simple matter to make the CoCo payment out of funds allocated to the bonus pool - and it will not be a discussion.
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Agency can be a bitch!
SD
Ohh, well! :
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... Everybody knows that these things can convert in equity at inopportune moments and even if all of them convert into equity: nobody gives a **** ....
This board is about making money by value investing, and cooperation by discussion to get better at it [making money by value investing]. Personally and right now, I consider it a better trade off to move on without reading your personal [at least to me: biased] comments like the above.
It's about not knowing all positions of fellow active and contributing board members, and respect. Recent posts in ZINCK-topic comes to mind about concluding, with mutual respect - We are all humans here on board.
Likely I will miss out on some good comments and considerations from you. I will live with that, to avoid what I don't like in your posts recently.
Recently I read a post on this board from a member on this board "taking pleasure" in things going wrong for Ackman. I don't understand that line of posting on this board, nor do I have the will to try [ref. what I wrote above what this board is about].
Specifically I asked ni-co to start this topic, because ni-co is short SAN [from what I have read so far from ni-co - reasons, that I can't turn down right now [likely not at all], and that makes an impression], and I'm long SAN [a lot].
This is what this board is about : Getting better by discussion and related reasoning. Actually, I hold ni-co's starting post very high, he might be helping me as a short, while I'm long right now.
Disclosure : 5 largest positions right now, calculated based on Friday close : Cash : 36,4%, BRK : 12,1%, SAN : 7.9%, Novo Nordisk A/S [NOVO. CPH] [uS ADR : NVO] : 6.0%, MKL : 5.0%.
Time to get to work on this. I will wait for the disclosure of the full financial statements for SAN 2015 at the end of February 2016, and I will tear it apart to atoms [exactly a bean counter job], and I will report back here on board.
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ni-co,
Thank you for a very good post here. Actually, I think investing in European banks nowadays could deserve it's own separate topic in the General Discussion forum, so I suggest that you repost your last post above as a starting post in a separate topic.
Thank you. Done. See this thread.
Thank you for the topic split, ni-co. I think it's important [- at least for me].
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ni-co,
Thank you for a very good post here. Actually, I think investing in European banks nowadays could deserve it's own separate topic in the General Discussion forum, so I suggest that you repost your last post above as a starting post in a separate topic.
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Just sell everything guys and go full short. I know you want to do it.
Please don't slap me while I'll continue - week by week - going forward, in small drips, one by one - to buy what I consider quality stuff, in the aim of getting [still] a lot of cash to work.
I knew there was someone raising prices on the stuff I wanted to buy.
Jurgis,
I'm not even trying to be arrogant, [trying to out]smart [you], nor even trying to be patronizing here: Quite a few of your posts on here lately does not make much sense [at last to me], ref. your plan to start indexing.
If you suffer from burnout [ref. one of your own posts lately], personally I would take a break from this [investing][again: I'm not trying to patronize you here].
European Banking Crisis?
in General Discussion
Posted
European Union Updates Bank Stress Test Beyond Pass/Fail
http://www.nytimes.com/2016/02/25/business/dealbook/european-union-updates-bank-stress-test-beyond-pass-fail.html