John Hjorth

SlowAppreciation, Why are you looking at Berkshire earnings pre tax?

Thanks, cubsfan. Good point.

Just some more or less random thoughts here, longinvestor, Some more dots here, without trying to connect them all: I was very surprised, when I read Todd Combs would join the board at JPM. That board seat seems to me be quite "heavy", involving a lot of work, along with Mr. Combs work as Berkshire investment manager. I was also surprised to read page p. 44 in Mr. Dimons 2016 JPM Shareholder Letter. Link. I did not know about any close contact between Mr. Buffett and Mr. Dimon before that. I suppose that this particular public initiative must have involved intense discussions, meetings etc. Most likely, Mr. Buffet is giving his two money managers leeway to build up their network of contacts. That is good. Ref. the 2016 Berskhire Shareholder Letter issued this year, the two investment managers run about USD 21B in total, of which USD 7.6B is pension trust assets of certain Berkshire subs. The total stock portfolio is in the shareholder letter stated to about USD 122B at 2016 year end, ex. KHC. I have several times asked my self the following question: "If I had the opportunity to ask Mr. Buffett to draw a group chart of the Berkshire companies, what would he do in the drawing with: AXP, KO, IBM & WFC?" - - - o 0 o - - - With regard to the successor of Mr. Buffett, we all speculate, including me. My speculative guess is still the best person within Berkshire to evaluate risk, despite age. - - - o 0 o - - - With regard to the Vice Chairman position on the Berkshire board, I think we must all live with what to come on that position - unless any of us die before Mr. Munger. To me, there is nobody like Mr. Munger out there.

INVE A.STO A lot of it, this morning, as a trade on the 1st quarter 2017 reporting for Investor AB with regard to reported Net Asset Value end of March 2017, where I expect a material increase, perhaps as much as SEK 30B, primarily related to wholly owned Mölnlycke. 1st quarter report will be out 24th April at 12:00 CET. If interested, please take a look at the powerpoints in the clip from the Investor AB Capital Market Day held in Stockholm on 30th March 2017, especially the powerpoints at the 0:40:38 mark. [You can see the powerpoints if you do not run the clip in full screen mode, and you can navigate the clip by just clicking on the powerpoints.] I will roll the position back to full long term position, with proceeds back in to cash, no later than end May this year. Perhaps the conglomarate discount on Investor will just increase materially. I will for sure find out.

Pelagic, To most of the extent of your post, I personally agree. In short: Mr. Buffett has written in the BRK Shareholder Letters, that this is about a "social contract" - [bRK: You make sure we make some decent money on our capital invested, and we will make sure you have access to energy ...]. - Germany is [to me, at least it seems to me] - just different. A deal is a deal - a handshake is a handshake - except in Germany, where it to me seems obvious, that everything already agreed on, can be [political] subject of discussion. I will never pour capital into that industry in Germany again.

Jurgis and Cardboard, I remembered reading this article some time ago: Danes invent safe nuclear power plant. I'm not an engineer, but from reading the article and taking it at face value, some problems with nuclear power today seem to be related to the technology chosen in the early days of nuclear power.

Thank you for an excellent post here, kab60. Mr. Taleb defines an antifragile thing as a thing, that gains strength, when it is subject to disorder, stress, headwind and punches from some direction, perhaps several. I have had severe second thoughts going forward in recent months with an intention to buy more of long term positions, and I have been struggling with getting some structure on my thinking. Here is what I have started to do - position by position: 1. I go back to the '08 financials of the company and study it, trying to find answers to the following questions: 1a. What was the financial position and overall condition of the company then [in most cases - just around early spring '09 - thereby near the buttom]. 1b. What did the management then express of expectations going forward - short term, mid term and long term. 1c. What did the management express in the spring '09 that it would do short term, based on 1a combined with 1b. 2. Then I look at the '09 and '10 financials from the same angle , as mentioned under bullet 1 - including specifically looking for hindsight bias in the management and chairman letters for those years. 3. Then I take a look at "now" - the '16 financials, and ask my self the questions while reading: 3a. What is the financial position of the company now? 3b. What changes has been made to management, investment strategy etc. since '08 - '09? We all now know in clear hindsight, that the worst action - then - was to panic near the buttom and go on the side line for a period of some extent. So far, I have looked at BRK, INVE A.STO, LUND B.STO, INDU C.STO and SCHO.CPH this way. What has been really striking to me, is that they have all been overall faithfull to their investment process, investment policy, policies about use of leverage etc., all actions based on expressed expections near the button in the spring of '09.

Cigarbutt, First off all, Berkaholics are quasi-autistics! - I like your humor. I really need some time to think about the contents of your post. I'll get back to you here then.

An SA article, by Left Shark Investing, in my humble opinion, worth a link here: Berkshire Hathaway: An In-Depth Look at Normalized Return on Equity. I like the line of thinking and method of shaving off "Insurance" from "Insurance and other", thereby trying to analyze the earnings etc. of the big black box called "Other".

10K?!? In a separate thread, someone advocated your portfolio obliteration! Just kidding, and I hope I didn't overstated the someone's response, which I more or less agreed with. I started small too. I deliberately evaded that dimension in my reply to paarslaars on 22nd March this year, despite I understood that dimension also in the post from paarslaars. All on this board started out somewhere, doing their very best from the very first day to get the snowball rolling, based on some kind of initial capital, whatever size. There are topics and posts about "synthetic portfolios" laying around a few places on this board [actually I'm a bit puzzled about that]. It's about putting some of your hard earned to work - not "paper-money". There are shades of your own personality, that you will never get to know about, if you don't do it. Mr. Taleb is calling it "Skin in the game".

Off topic: I suppose it's evident to everybody that I have lost some money on E.ON and RWE. And those Uniper shares I can't even ask for getting delivered as physical stock certificates [for use on the toilet] in our modern time, where everything is going on digital. So, In short I just got carried away and thought it was time to slap the German people in general. Last time it was Uccmal and I who totally agreed on Italian style problem solution, based on the train wreck of the Italian banking system. Please accept my apology, if you are reading this and you are German, and if I have offended you.

energy generation in the united states is moving in the same direction. sys, Thanks. My perception might be wrong - on overall basis. I think that is what you meant. What I meant specifically with my comments was, that there is long term zero tolerance in the major parts of Europe going forward in the long run towards energy generation based on coal, which not to the same degree [at least to me - I might be wrong here] seems to be the situation in the US.

Valuehalla, I'm reluctant to new approaches for valuing Berkshire, for more than one reason: 1. Mr. Buffet him self has in several shareholder letters giving methodical overall guidance to shareholders about how to make own judgements about their investment. 2. There have never been any "promises" about the future of Berkshire, because there is no formal strategy as such - except for capital allocation and overall adaption to existing conditions in a broad sense. We do not even get any formal and structured short term [for the coming year or so] guidance. I'm not even sure of the existense of an internal budget consolidated at group level. Personally I do not think it exist. What matters to me, is on running basis to have some kind of perception the relationship between book value per share, the soft buy back treshold, market price and intrinsic value based on already existing valuation methods for Berkshire. Here I'm talking about ranges for for each number, without trying to make it an exact science with calculation results with double underlining and x decimal places. - - - o 0 o - - - Personally, I consider Berkshire a buy right now, compared to much else, under the recent market conditions. Right now I expect to buy a lot more going forward, which naturally might be subject to change. - - - o 0 o - - - My earlier posts about the Berkshire cash flow was ment as comments about what has been discussed many times everywhere, also on this board: The drag on returns because of size. Personally I think many investors underestimate the value going forward of two very special Bershire characteristics - in combination: 1. The enormous cash flow from operating activities, combined with: 2. Outstanding capital allocation skills at the 4 persons taking care of that particular part of the whole business, thereby making it possible to grow - without issuance of new shares. rb posted about it yesterday in the topic "Anchor defensive holdings". - - - o 0 o - - - On this board fellow board members has posted speculations about the next large Berkshire aquisition, including my own bablings and thoughts on this topic. My point then was that there is today no privately held US company large enough to move the needle for Berkshire, that with a reasonable probability could be considered an volunteer aquisition target. I looked on this side of the Atlantic also, based on advice from rb, especially Germany. I found out, that many of the large and good privately held German companies were controlled by foundations, who would likely never sell. So to me, the next large Berkshire aquisition most likely will be a company today listed. That I do not expect to take place unless the price appears to be right for the Berkshire investment team. Most likely that will not happen before we are in the next material downturn. Untill then I do not expect a material increase in cash flow from operating activities - it will be lumpy going forwards, in steps, combined with macro effects on that figure.

Personally, I share your opinion on nuclear energy. Here it is acually tabu to have such an opinion,so I keep it for my self most of the time. The political decision in Germany to shut down all nuclear power plants after the TEPCO accident seemed madness to me. It created large losses in the German utilities E.ON and RWE. E.ON has spun off all coal powered plants in a separate company called Uniper, handing out Uniper shares to existing E.ON shareholders : "Here you are - mess around with this thing yourself - we have had it with it". [German style of problem solution : In stead of solving the problem, .]

The board has worked fine for me today during the day - no issues at all. Jurgis, your experience today sounds like this is about some "update flux" in the DNS servers between your place in the US and the geographical location of the netservers run by Sanjeev's host - that geographical location can be just about everywhere on the globe. It was mentioned earlier in this topic by Sanjeev, that the board was moved to another server to get it up running again. If my speculations are correct, your issue will disappear in short time.

Eurelectric : European Electricity Sector gears up for the Energy Transition. General public commitment to no investments in coal fired powerplants in Europe after 2020 [except for Poland and Greece, who have not committed]. Certainly a different direction than what I perceive is the future direction on the other side of the Atlantic Sea.

I'm tempted... I bought ESRX & am perfectly happy owning it. Am I right in thinking that CVS & ESRX offer inverse corollaries to biotech/pharma? I figure if drug prices go down, NVO & BBH suffer but ESRX & CVS do well... I really like your thinking here, DooDiligence - and you know why. Thanks for your help so far. I haven't reached any conclusion for myself so far. To me, there is no doubt, that the value generation in the pharma value chain will stay at about almost intact in a severe downturn going forward, all depending on political risks, some how related to the state of the affairs, on overall level. Please take a look at the share price of NVO, that I know you own, for the period, say - beginning of 2006 to end 2010. It did not get dragged down in the GFC as much as almost other things. - - - o 0 o - - - The point here is, that this is about stocks, not about anything else [Nothing mentioned here by purpose] . Otherwise you would likely be considered a hethen by somebody. The point here is also, that you, when trying to make long picks to avoid the drag in the next serious downturn, you also end up exposing your self to some other risks, that you have to evaluate - correlated to your "original" risk [the risk, that you wanted to avoid, circumvent, mitigate, whatever], or not. There is no free lunch. That - however - does not change, that I'm personally attracted to you line of thinking., and I'll pursue it in my work going forward.

Valuehalla, The board has been down for some time [basically 1st April - 3rd April], and some posts have unfortunately been lost, unrecoverable. If you are able to, please just repost your post about your considerations about BRK IV, based on cash flow considerations. I did not get the opportunity to reply to your post before the board went unavailable.

Also thank you to you, wachtwoord, for reply here. The same here. I have spent 100s of hours during the last few years looking at Danish small caps with either a lot of issues [owner/operator behaving as he's owning the whole thing, or just running the damn thing for his own giggles], or at totally ridiculous prices. I call it kissing frogs. The same apply to many constituents of the primary Danish Stock Index [OMXC20CAP] with regard to my judgement of relationship between price and quality. Better to go somewhere else with the capital. PS: Time for me to get back to Wilhelmsen!

writser, Every time you post I read your board signature carefully! I moved about 3 per cent from cash to stocks with what I did yesterday. After not buying about anything within the last several months, while still adding every month to tax deferred acounts for the Lady of the House and I. Mini thesises, without starting new separate topics, if they are not there already on CoBF [max. 10 lines per pick]: SCHO.CPH [schouw & Co. A/S] Covered here on CoBF. I consider it now about somewhat fully priced. Better getting something in stead of nothing on cash in tax deferred accounts. I may be wrong here going forward. JDAN.CPH [Jeudan A/S] A Danish real estate company, focused totally on Down Town Copenhagen. About 200 units right now. My family and I have held it for years, it has done well, however nothing flamboyant. It has grown a lot over time. If hell appears on earth again - like '08 - '09 - I suppose this company will pick up like stealing candy from kids, using leverage. If it gets worse than '08 - '09 going forward, I'll most likely just be diluted by tobacco money [Chr. Augustinus Fabrikker A/S] and hearing aid money [William Demant Invest A/S]. Both about 40% stake each. Unfortunately no English financials available - most likely only my fellow Scandinavian board members can read the financials. I'm looking at EBVAT/share relative to market price of the stock here. TOP.CPH [Topdanmark A/S] A well run Danish - mainly P/C - insurer, focused on the Danish insurance market. A compounder - no dividends for I do not know how many years, all yield to shareholders in buy backs [the BRK shareholders of this board know the drill!]. It has moved just about nowhere within the last year. Noticed in the market, that recently "Anonumous" is selling a lot, while Nordea is a hefty buyer - not so much in the last few days. Last week TOP flagged increase of treasury shares up above 10 per cent. Thinking Sampo Plc is is nowadays off loading stocks, to suck up other TOP shares from shareholders [please read : cheap] , who have lost their mood on this thing, while TOP buying heavily. Last flag from Sampo Plc was at 42 per cent after an open bid, Sampo does not have to flag again downwards before passing 33 per pent. INVE A.STO [investor AB] Swedish investment conglomerate doing well now over many years. Please take a look at this press release, and make up you own mind. [Jurgis, I haven't forgotten my promise to you]. I have posted about this company on this board before without starting a topic in the investment forum. I hate EQT, but I get for free. LUND B.STO [L. E. Lundbergföretagen AB] Silly price right now, yes - My fellow Swedish board members might be shaking their heads. If you study the RE part of the conglomerate [2 subs, one wholly owned], you find out it's the rock of Gibraltar. I expect this company over the coming years to buy more of Industrivärden AB, to gain factual control [<50 percent, >33 per cent], based on cash flow from operations. INDU C.STO [industrivärden AB] This company has a poor performance record for the last 10 years or so. What happened is actually, that it got caught in the 08' - 09' with the use of leverage - one foot on a banana shell, the other [almost - I'm exaggerating here], in the grave hole. Hint: If interested, please just read the chairman and CEO Letters in the 2016 financials. Mr. Lundberg - majority shareholder and CEO at L. E. Lundbergföretagen AB, has already made a lot of changes since he took the chairman position last year.

Thanks for your elaboration here, rb.

rb & wachtwoord, I'm not sure I understand your posts. I read those as "I have an anti home bias". -Your replies will make it easier for me in replying to writser's post, thereby exposing how dumb I am.

Added yesterday to : SCHO.CPH [schouw & Co. A/S] JDAN.CPH [Jeudan A/S] TOP.CPH [Topdanmark A/S] INVE A.STO [investor AB] LUND B.STO [L. E. Lundbergföretagen AB] INDU C.STO [industrivärden AB] All long term positions.

I experienced the same mentioned before in this topic. Thanks for getting it fixed, Sanjeev. I'm sorry for your loss of time on this mishap out of your control. rb mentioned some posts lost in some topics, among others in the SCHO.CPH topic. For my part, i'll just repost as a "repair" post. No big deal.

IMO, this really is the key ;) Scott's shit smells better than mine. I personally love rubbing my nose in it Off topic: Somehow, it's good humor, Spekulatius! : - ) - Is that the reason why you chose to fled Germany [The lack of humor, I mean]? - Question asked based on personal experience with German business people!