John Hjorth

Thank you, gfp, That explanation makes good sense.

Pulled out all available cash in my fathers account again today. Sold a bit less than one third of my fathers position in SAN today [at a loss]. It appears the account won't stay under the set goal/max. exposure, set now more than 5 years ago. I will drag out the cash [for good], when it's available after two days, if things don't fall back again. - - - o 0 o - - - It's starting to feel like raising a tent on a windy spot on sandy soil, where the tent plugs on the windy side of tent get dragged up from the soil by the wind pressure on the tent, where you use the rubber hammer again and again on the plugs. The difference between this activity and the "tent-plugs-won't-stay-in-the-sandy-soil-because-of-wind" analogy is that this activity does not feel annoying. I begin to understand how Mike [boilermaker] feels when Mike has been selling Berkshire B puts below 200.

It's time of the year for the usual gift to the five foundations from Mr. Buffett. Edit: Friggin' mind boggling numbers in that press release ... - heck, the only number related to Berkshire that I can come up with that isn't mind boggling is the number of shares oustanding! [ ; - ) ]

Thank you for the elaboration here, kab - it's much appreciated, & nice to actually know.

Great that you shed some light and nuances on the Danish situation about real estate prices, kab, thank you, I have a couple of more technical questions about how your mortgage with negative interest works : 1. In your post about your mortgage you indicated, that the negative interest isn't paid out to you, but is booked as a repayment on the principal [,so despite you have a standing loan/mortgage for the first ten years, the balance of the mortgage is going down over time with the negative interest payments]. Have I understood this correctly? [Cigarbutt actually also posted about this phenomen recently here on CoBF not so long ago.] 2. I suppose you are still charged reserve fund contributions, and are paying them. Have I understood this correctly? - - - o 0 o - - - Yes, indeed, the whole thing is very weird.

RuleNumberOne, Perhaps I misinterpret your post here, but please try to invert your post, by assuming a 10 percent price decrease instead. Draghi & Volcker do not set market prices on real estate - buyers and sellers do. This post is not meant condescending towards you. I assume we all know about the mechanics of the use of leverage, actually.

I see Denmark mentioned in the quote by Viking in the starting post in this topic. This post is about my personal perception of Danish interest rate conditions, based on my actual cursory knowledge about the Danish market for mortgage bonds etc. Finans Danmark : Bond rates. Translation of legend : Red: Short Euro rate Brown : Short rate [DKK] Grey [sort of] : Long rate [likely DKK] So the long [likely 30 years] fixed interest rate is right now 1.647 %. On top of that you have to pay a spread of ~1 % to the mortgage institution, in Danish "reservefondsbidrag" [translates to "reserve fund contribution"], which is the mortgage institutions running earnings on the mortgage. The spread can be a bit lower, based on your rating. Mortgages with variable interest are typically rolled over after 1, 3 or 5 years. In Danish called "flexloans" - F1, F3 or F5. Refinancing rates are set under bond auctions at certain dates. What happens if the Danish mortgage bond market is - perhaps more or less - frozen at the dates of the future auctions? What happened to GGP comes to mind here. To buy a home with mortgage [generally max. 80 % in mortgage] you have to have 5 % of the price as available cash, which can't be borrowed money, and after all other personal debt deducted [i think student loans in this particular calculation is excluded though.] Based on your personal budget and a standardized minimum available amount of money for consumption based on the household composition, you are eligible for the mortgage for the house, if you can afford a mortgage with repayments over 30 years [likely depending on your age also] with fixed rate. [in this budget you naturally have to include the load of repayment of student loans.] This practice is set by the Danish FSA - so to say as a "soft", but still de facto standard, meaning your bank can provide the last 15 % of the price as second layer financing, if it's willing to make a loan provision for the deviation. I'm not up to date on the actual standards for minimum available amount of money for consumption for now some years, but last time I asked about it, I was surprised how high they were. You can opt for a "punch card" on your mortgage with ten punches [each punch is a year without repayment, subject to that the mortgage is held within agreed duration], if the economic situation for the total household changes to the worse, compared to the budget [unemployment etc.]. This practice makes a lot of sense to me. So the "free" debt, that really isn't free [but still cheap], is certainly not available for everybody here in Denmark.

Viking, In the "Buffett/Berkshire - General news" topic some of us discussed recently the issuance by Berkshire of 20 & 40 years debt at very low rates. There, shalab proposed, that what's going on with the US yield curve [at least partly] may be explained by capital inflow from Europe seeking better yields [perhaps both short and long yields]. That explanation makes sense to me, at least as an explanation partly. The sentiment now popping up about rate cuts in the US by FED certainly also has moved the USD/EUR pair a bit, making the USD weaker relatively. When I look at my portfolio, I was at all-time-high on April 29th, measured in DKK [, pegged to EUR]. - - - o 0 o - - - No matter that, it feels discomforting to observe this phenomen. Personally, I try not to think too much about it, trying to tune out all the noise, simultaneously improving my internal rating & popularity by taking care of my other compounders : Roses [mainly climbers & ramblers] and hostas, and building up the lawn again after last years drought. [ : - ) ]

"The resources sector is like a bad girlfriend. She's volatile, inconsistent, and sometimes she treats you good but most of the time she's crazy. And while you're wasting your time with her, there's all these other beautiful women you're missing out on." H/T Pytia Cap(ital).

This post by Paul combined with the last post by Richard brings up a question for Paul: Wikipedia : Euphoria Isen't there an element of multidimensional relativity to the phenomen? -I mean : 1. It can be related to several kinds of activity, ref. the Wikipedia article, 2. Some persons engage in it, some don't [, perhaps because the euphoria isn't triggered or an effort is done keep it under control]. In casu for Paul, I think that it's likely that 20+ years of investment experience has made Paul less detached to things going in certain areas in the stock market, i.e. - & here, - under the tech bubble in 1999? [Meant as another way of saying : "Paul does not "feel" [perhaps the word "perceive" would be better] the euphoria because he "minds his own business" to a greater extent than earlier with regard to investing, likely based on experience & training."]

WayWardCloud, In a humble manner I will suggest that they are perhaps hard to spot because they stand behind others. If you read the last shareholder letter by Larry Fink you'll see that he is of the opinion that there is an urgent, almost desperate, endless & ever growing/expanding need for help. If you read the shareholder letter, please bear in mind what Mr. Buffett has written about helpers. Perhaps that also leads to the conclusion that those people are not optimistic, more like "un-opinionated" [<- or something like that].

I will here suggest reading the posts recently, with links and attachments, by ajc, here on CoBF.

Pulled out all available cash in my fathers account again today.

It's not that kind of real estate that I prefer to own, that the Danes are doing this with, Jurgis, [ : - ) ] They are [generally speaking] doing it with that kind of real estate, that is called homes, which have the properties of not being cash generating - only cost generating. So basically it's borrowing with a liability posted as collateral. Cigarbutt's post made me look around [we have public records here about how real estate is mortgaged]. That action caused a grenade shock. - - - o 0 o - - - Perhaps we should continue this discussion in Seth's topic about cost of capital instead of here.

Your analysis of what's been going on with the Himalaya Capital Management portfolio is just straight out awesome, Dynamic. I also hold your work in this topic with the Berkshire portfolio very high, now during almost three years. To me, it's a gem - nothing less. Thank you for sharing.

In any case, it wont harm you to revisit Dynamic's post of January 25th 2019.

Thank you for sharing, Spekulatius.

Spekulatius, I've - with great interest - been following your moves for years. [However I do not understand some of your moves, to me basically because your investment universe is much larger than mine, based on that you have multiples of investment experience & stock picking knowledge compared to me.] This move by you is a surprise to me with regard to EXOR.MI & FCAU [i'm unopinionated with regard to FRA.DE.] If you would take the time to elaborate just a bit on your line of thinking here, I would personally appreciate it very much.

Thanks, shalab, That makes sense, perhaps combined with local/national capital allocation restrictions among asset classes for those pension funds. Viewed isolated it just looks like the last idiot isen't dead yet.

Amazing notes transactions, gfp, Thank you for sharing. Berkshire working on both sides of its balance sheet. Do you know who is the decision maker at Berkshire on such transactions? - Mr. Buffett, or is this perhaps the playground for Mr. Hamburg? To me it's incomprehensible that somebody will tie up capital for 20 & 40 years respectively on such conditions. I wonder who is buying this stuff?

This is turning ridiculous - for your part, muscleman.

I'll do that, Dynamic.

I understand it exactly the same way as you do, Dynamic, Recently, I have been pretty annoyed about KHC - as a part of the Berkshire sphere - not being in compliance with regulatory reporting requirements for a US listed company. I've spent a couple hours today reading the KHC 10-K. It has softened me up a lot. The work with the KHC 10-K is from a professional angle to me very good, - at first glance. David Knopf - the KHC CFO - appears to me to be competent - he's fairly young, 31 years old. I need to study the 10-K more, as of now.

Added to LVMH [MC.PA] today.

Hi Lance, I just looked around Saturday afternoon now almost about two weeks ago because of the jump in Gazprom [, now up ~40 percent within a couple of weeks, ref. the Gazprom dividend release mentioned by TwoCitiesCapital in the OGZPY topic]. I think it must have been late 2013 I last time looked at Rosneft - I was then pretty much overworked and stressed in relation to running on full throttle downsizing for our two parents still alive. So I think I must have drifted away from it mentally because of that. I was a bit surprised under the revisit to Rosneft - much larger than compared to my recollection from back then in 2013, likely based on anchoring in the Rosneft 2012 financials, not fully comprehending the effects of the TNK-BP deal between Rosneft and BP closely related to BP's situation after the Macondo Blowout. Rosneft appears to smoke every other large oil company with regard to reserve replacement ability, but I'm not sure I understand it correctly. I need to read some more to understand it. Rosneft is somehow Mr. Putins puppy, but the shareholder presence of BP & Qatar Holding with a total ~40 percent ownership counters it somehow, I think. I still hold all shares of Lukoil bought back in august 2013 & August 2014, and all shares of Gazprom bought May & June 2013. Mentally I think of it like the dividends received are repayments of invested principal, and then go somewhere else with the dividends. To me that's a way to mentally handle the political risk, combined with modest positions. Lukoil has worked out satisfactory, Gazprom not so far, but I think Gazprom will deliver much more going forward [Gas to China]. It's investing in "hold your nose"/generally out of favor/hated companies, operating in the "dirty"/"black" part of the energy space, based on good dividends.