John Hjorth
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Posts posted by John Hjorth
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Let me here just say:
Geez, I'm really tired of this topic, because I do not [basically] consider it investment related. [However just about everything allowed for discussion in the "General Discussion" forum].
Edit :
Perhaps "the issue at hand" is that I haven't been "attacked" by anyone one here on CoBF for some time now? [To keep me sharp!][ ; - D ]
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Greg,
Is it OK with you to widen up the topic a bit and post thoughts without actually mentioning names, thereby also adding to the topic a slightly different angle?
Absolutely. I think even inadvertently I realized the need for this when Casey posted on "the next FANGs". It can have different meanings or angles to look at depending on how you look at them. IE next already establishment large cap turning into mega T-cap. Simple a moat and long runway. A revolutionary or disruptive technology.
In its simplest form I'd suppose the FANG premise is merely a gargantuan wealthy creating machine. This can be influenced by many different things, events, or circumstances, some perhaps we've seen before, others maybe we have yet to see.
Thank you, Greg,
And btw, certainly an interesting topic!
My request about omitting names was based on that to make a killing on something like the FANGs of the future, to me personally, there are conditions that needs fulfilment in the first place:
1. One need to pinpoint the company before it IPOs [after which one buy it in the IPO]. Thus the "no names" request from me [, because you can't buy it right now, unless one have sufficient capital to participate privately in some VC adventure before that],
2. Likely, it requires certain specific professional skills to actually see the potential, the moat and the long runway [circle of competence], in reality only possessed by few persons.
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Thank you for sharing, Spekulatius,
Stay humble to the game.
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Greg,
Is it OK with you to widen up the topic a bit and post thoughts without actually mentioning names, thereby also adding to the topic a slightly different angle?
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Looks like Sweden's GDP numbers aren't better than neighbours:
https://twitter.com/econhedge/status/1294212933266931712?s=20
Sweden Q2 GDP -8.6%, Denmark -7.4%, Finland -3.2%Of course there are many variables, but still, it's a data point that doesn't help support the approach.
Also, since about May, many European peer states are just as open than Sweden. Schools for example opened in late April or May in Germany and Denmark. I don’t know about France though.
One of the issue that caused the recent outbreak was travel during the summer. There were issue with crowds in Mallorca (around the infamous Schinkenstrasse etc) and contact tracing showed 25% of thr confirmed cases due to travel and the real number is likely much higher.
On the same note, I think father day and 4th of July likely caused the recent surge in the surge that seems to be ebbing no. I expect another surge when schools reopen and on thanksgiving.
@Castanza- the protests certainly didn’t help, but most protests were in blue states and that’s not where the surge happened. So, I don’t think the protests were the main reason for the surge.
With regard to tiny Denmark, what Spekulatius here posted, is true, here, locally.
The whole situation here in Denmark is somewhat "messy & blended" :
- Outbreak recently in a meat processing plant [owned by Danish Crown] in Ringsted, about 50 km to the west from Copenhagen [it seems to be under control now, though],
- "Messy" situation in the second-largest city in Denmark, called Aarhus, located in Jutland,
- Pretty high infection numbers per capita in some municipalities around Copenhagen.
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Countermeasures disclosed to the Danish population today :
Compulsory use of face masks for all citizens using any kind of publicly available transportation. [busses, trains, leight-rails, taxis etc.], starting next Saturday.
- Outbreak recently in a meat processing plant [owned by Danish Crown] in Ringsted, about 50 km to the west from Copenhagen [it seems to be under control now, though],
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Reichmanns
in Books
Is there something to deduct & learn from those books about the correlations between returns, size & libido? - In that case, I'll buy them right away! [ : - ) ]
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Reichmanns
in Books
I'd be very interested in reading it after you give your review. Although I read voraciously, I have an OCD thing about finishing books that I start, but at 800+ pages I want to make sure it's worth the time :)
Personally, I must admit for this year, that - so far - I've failed with regard to reading activity [too much IRL stuff to handle]. But Saluki's post, combined the post by VersaillesinNY now has me turned on.
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You'd think that one obvious thing in a pandemic is to allow voting by mail, as has been done in all past elections, and has been the norm for military voters forever.. But this:
https://www.businessinsider.com/trump-admits-he-wants-block-usps-funding-sabotage-mail-voting-2020-8
Liberty's post triggers me to ask a question: Doesn't a digital public ID exist for US citizens?
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Phase 3 trials are for wussies.
True men chew glass, drink jet fuel, and do not need no f**king vaccines.
Jurgis,
I think you forgot to add [, ref. the Russian context here] "... and go on summer vacation trecking in "the Russian [now, for some years "untouched" & left alone] national park" called "Tjernobyl"."
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With regard to the AAPL position, has anyone of my fellow board members tried to tie the value in the "Big Four" statement to the last known share count for AAPL shares held by Berkshire? [bRK plus NEAM numbers [, if any]].
Heck, here we go :
AAPL closing price EOP 2020Q2 : 364.80 [source : Yahoo! Finance]
AAPL shares held EOP 2020Q1 by Berkshire : 245,155,566 [source : Dataroma]
AAPL shares reported by NEAM EOP 2020Q1 :1,452,250 + 3,578 [= 1,455,828] [source : NEAM 13-F/HR EOP 2020Q1]
Total : 246,611,394
Calculated market value EOP 2020Q2 : 246,611,394 * 364.80 = 89,963,836,531.
"Big Four" comment states "$ 91.5 billion".
So there was added to the position during 2020Q2?? [ 0_0 ] -Did I get it right?
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With regard to the AAPL position, has anyone of my fellow board members tried to tie the value in the "Big Four" statement to the last known share count for AAPL shares held by Berkshire? [bRK plus NEAM numbers [, if any]].
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Very nice to see you back, Valuehalla! [ : - ) ]
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Xerxes,
I must admit, that at first glance, I was personally stunned, too. But I quickly regained posture about it. It's honest accounting, because the destruction of value here is real.
Edit:
Yes, reversal of impairment losses on goodwill is prohibited, ref. IAS 36.124.
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Also this:
But people aren’t getting their tests back quickly enough.
Well, that’s just stupidity. The majority of all US tests are completely garbage, wasted. If you don’t care how late the date is and you reimburse at the same level, of course they’re going to take every customer. Because they are making ridiculous money, and it’s mostly rich people that are getting access to that. You have to have the reimbursement system pay a little bit extra for 24 hours, pay the normal fee for 48 hours, and pay nothing [if it isn’t done by then]. And they will fix it overnight.
Why don’t we just do that?
Because the federal government sets that reimbursement system. When we tell them to change it they say, “As far as we can tell, we’re just doing a great job, it’s amazing!” Here we are, this is August. We are the only country in the world where we waste the most money on tests. Fix the reimbursement. Set up the CDC website. But I have been on that kick, and people are tired of listening to me.
FWIW, the speed of testing seems to vary a lot from state to state. In MA, my wife went to a testing station and got the results back in less than 24h. There are also CVS rapid test stations around that are even quicker.
Yeah, it's a mess because there's no federal leadership and resources to help places that fall behind or get the right incentives and guidelines uniformly. I'm hearing about a lot of places where it takes 10-14 days to get a result. By the time you get a "negative" result, you've had time to get infected, and you think you're negative (oh, I'm feeling bad, but it can't be COVID..) so you're even more dangerous because you may not quarantine even when feeling some symptoms..
Pretty amazing read, to say the least.
Everything can be turned into a "problem", if one wants to [in the in casu situation]. *Shaking head* [Are those citizens awaiting their test outcomes not aware about what to do while waiting for test results?]
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It is indeed very thought provoking. Theres a few things to look at and wonder.
-Buffett said, in a not so veiled way that BRK was effectively "more cheap" at 225 in Feb than it was at 175 or so in early May at the time of the AGM.
-Buybacks had stopped
-His tone at the meeting was death
-He sold airlines and WFC
-BUT! Bought back a record number(in absolute terms, and in terms of pace) shortly thereafter
-Has been adding aggressively to BAC
If we eliminate the idea that he was laying it on thick, and trying to scare people into selling their stock...all Im left with is that he basically came to a radically different conclusion than he had previously, (big thing for some here)---->Admitted he missed the big opportunity in March/April, but also, seems to believe there is very different potential outcomes, even within similar sectors...IE WFC is so rotten its not even worth holding but BAC is still steaming cheap....And that, BRK is in pretty damn good shape....There's more too, but all in all there is a lot to process here but it does seem compelling in terms of garnering insight into how the man is thinking.
Greg,
As already posted by me in this topic, your line of thinking is very interesting to me, and makes sense, to me. - Thank you!
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In terms of valuation – I view BRK right now as a 65-68 cent dollar, with limited downside due to cash. I’ve valued the biz all sorts of ways: DCF, SOTP, float as a negative carry, % of stock portfolio income etc etc. For me the purest and simplest way know; knowing full well, that it is better to be roughly right, then precisely wrong:
•BRK Market Cap ($500B) – stock portfolio ($230B) – BNSF ($110B) – Cash ($145b) = $480B. This tells me you are getting ALL Insurance – which generates 45% of pre-tax income, Utilities – which is extremely stable, and the whole MSR group of businesses at call it $20B. Does that make sense from a valuation perspective? NO. Which is why we’ve seen nice buybacks over the past few months.
•The real question is what the IV of the BIZ is
ValueMaven,
How the heck does that math add up? - You seem - at least to me - to be cherry-picking on the asset side & liabilities side of the group balance sheet here.
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So I am sure WEB wasn't lying, or doing his best Billy Boi Ackman impression, but given the figures....he'd have to have started buying back a more reasonable chunk of stock....right around the time of the AGM. Which, given what his tone was...is surprising.
To me, this post by Greg takes the palms as the CoBF post of today.
To me, it's mind provoking, actually. I have to go back and listen to the 2020 AGM video again. Talk to me about getting [or being] mind fucked with regard to Berkshire share buybacks. Back then, I should have been ridiculed here on CoBF for my sharing of huge Excel spreadsheats, hitting the bulls eye for the first quarter, after which just about everything collapsed! .... LOLz!
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I just rechecked my Berkshire WFC share numbers posted here on CoBF today in this topic :
Number of WFC shares YE1990 : 5,000,000 [source : Max Olson, "Berkshire Hathaway Letters to Shareholders 1965 - 2014", p. 275 [introduction signed by our fellow board member Max March 3rd 2015], &
Number of WFC shares YE1989 : 0 [zero] [same source, p. 253.]
There may be explanations for this [, ref. the source], but which explanation is the right one?
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Easier to ask than doing the actual work, ValueMaven,
- Please show us your numbers! [ ; - ) ] [, or I'll do it for you!]
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The more you look, the more it seems he must have sold all or almost all of the Wells Fargo position in the 2nd quarter. Berkshire held 345.689 million WFC shares at the end of the year at a cost basis of $7.04 Billion (avg CB 20.365 / WFC share). Berkshire did not sell much, if any, WFC in the 1st quarter (reported Wells as $9.9 Billion at market at end of 1st Q).
This note in the section on realized gains/losses shows how the losses recorded in the 1st quarter (as unrealized pass through the income statement) became realized in the 2nd quarter. - from page 11 of the most recent 10-Q:
"The losses on securities sold in the first six months of 2020 ($11.2 billion) include losses of $10.7 billion from market value changes in the first quarter on securities that were sold in the second quarter."
And as John noted above, the Cost Basis for the equities category Banks, Insurance and Finance declined by $9.681 Billion during Q2.
No wonder WFC share price has been so weak! There was a 345 million share seller in the market
This is a very good catch, gfp,
Suddenly one has a perception of a very active quarter with regard to the Berkshire stock portfolio, the airlines got the boot/ax [ref. CorpRaider's last post [yes, we have to remember those disposals, too]] and now this material decline in [likely] banking exposure.
Add to that, a reasonable share buyback at what I consider very good prices, ref. wabuffo's last post in this topic.
In short, Mr. Buffett hasen't been spending all his office time during that last quarter on the couch, at the Coke dispenser in the office, or inhaling burgers!
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With regard to WFC, I just looked up how long that investment relationship has lasted by now for Berkshire [, using the shareholders letters]. The first 5 million shares were visible there for the first time in the 1990 shareholder letter - That's 30 years by now!
I wonder how much cash that investment must have thrown off / generated over the years? - It must be a lot!
If Berkshire is indeed exiting WFC now, it's almost an emotional moment.
Yes, we better stay open minded and just wait for the 13-F/HR, ref. gfp & CorpRaider.
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Yikes. I could see the WFC dropping out of the "big 5" based on stock price movements (his stake would only be worth ~$8 billion without any sales so just another of several holdings in the size range) but the basis reporting....
Thanks, CorpRaider,
- I think it must be evident to the reader, that I'm not a WFC shareholder directly! [ : - ) ]
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Cost basis of stocks labelled :"Banks, insurance and finance" reduced by USD 9.255 B [uSD 40.149 B - USD 31.164 B] in the first six months of 2020.
"Big Five" comment on p. 9 changed & "boiled down" to "Big Four" comment, WFC now omitted EOP 2020Q2 [, while it was a "Big Five" comment EOP 2020Q1].
Sales of stocks in 2020H1 at USD 15.743 B, ref. cash flow statement.
I wonder if Mr. Buffett has been off-loading WFC aggressively in 2020Q2? ["Horse-change" to going really heavy on BAC from here?]
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Here is my casual reading stuff for today, to get a more granular understanding of the states in USA, while I'm waiting for the Berkshire 2020H1 10-Q, expected within a couple of hours.
[i think the description of Wyoming is the best. [ : - D]]
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Looks like there was some abnormal excess mortality in Portugal & Spain, based on Euromomo. However these statistics lag by aprox 2 weeks. Recent reports indicate COVID severity is falling: https://www.reuters.com/article/us-health-coronavirus-portugal/portugal-reports-no-coronavirus-deaths-for-first-time-since-march-idUSKCN24Z1VB
Curious where you've seen 'severity falling?' Awesome news if so.
I'd read that it was unlikely for this virus to mutate/change too quickly (https://www.nature.com/articles/d41586-020-01315-7)
I meant "severity is falling" in regards to Portugal, as corroborated by this post:
https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/coronavirus/msg425878/#msg425878
No comment on the virus's severity, I am certainly not qualified to opine on that.
Ahh, gotcha. Thanks. I have been following things less closely recently. I do expect "severity" goes down in some sense - as we continue to figure out what works for treatments and hopefully get some vaccines going at some point
Interesting exchange between LC & Casey,
Now, please stop mentioning Denmark [in this topic] as one of the primary examples of "good pandemic counter measures" [simply because, it ain't [any longer]] :
1. Hot spot in Danish Crown meat processing plant in Ringsted, located about 50 km [or so] SW of Copenhagen, [spekulatius has posted about something similar going on in Germany recently], &
2. Things have started to go haywire [Corona-related] within the last few days in the second-largest city in Denmark : Aarhus. [in Jutland].
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To me, it's just "Dunning-Kruger in second power". People are just so unbelievable stupid in their behavior.
What is Pabrai's Blackjack Secret?
in General Discussion
Posted
Sanjeev & Writser,
I'm not even searching - desperately - for DooDiligence's hurt feelings report once uploaded here on CoBF! [ : - ) ]
I've always found Writser's investment style fascinating. I suppose you guys are much more transactional in your investment style than me, which I think is perhaps somewhat related to taxes [i'm taxed on everything I do - no four letter abbreviation tax free account type available for poor me!].
I also consider Writser's comment "non-a$$hole", because it's actually a good explanation of Writser's modus operandi.
Have a nice weekend to you both! [ : - ) ]