John Hjorth
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Posts posted by John Hjorth
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I just want to post here my appreciation and gratitude for what you two gents are maintaining and sharing here on CoBF, SlowAppreciation & Dynamic.
Thank you very much.
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BG2008,
Gio lives in Milan. I'm sure he would be up to some sincere travel advise to you, if you send him a PM. If you do that please ask him to reply in this topic for the benefit of us all. I think Uccmal was in Italy on vacation last summer. Perhaps he reads this and chim in.
We were on vacation in Rome in the summer 2012. Very, very nice and beautiful city.
I had heard about Italian pick pocketing before we went there, and to avoid bad luck I did buy a small one strap sling pack for that separate purpose. This one. Please note the zippers with two handles for two of the openings and rooms. Bought two tiny padlocks to lock the handles together for the two rooms/openings. And then nothing but the correponding keys in an attached leash in the pocket. Everything else [phones, cards, whatever] in the two padlocked rooms, and wearing the slingpack on my chest, not on my back.
I also always put one credit card in the safe at the hotel, for emergency purposes.
It can't hurt to ask at your host or hotel, if there are areas in the surroundings that are recommended to avoid.
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... Keep in mind that Berkshire has something like a 175 billion equity portfolio now that will get marked. If you have a market crash (they happen!) that will seriously distort book in the short term. ....
They have already been marked, rb. The difference going forward compared to the past is the quarterly marking now will go over the income statement, not comprehensive income.
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Well, it's just not book value as such any longer then, but some kind of adjusted book value. The difference is conceptual.
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Today I have tried to find some information about this acquisition in the 2017 Annual Report, outside the Shareholder Letter. Not much that I've found so far - perhaps something has skipped my attention here outside the Shareholder Letter.
Page K-99: The contractual obligation to buy [80 minus 38.6] percent at a later moment. It's mentioned that the annual sales is about USD 20 B.
I discussed earlier in this topic with rb how the accounting treatment of this investment would go. If one study the minority interest in the specication of the equity movements during 2017, it can be observed, that there are no material additions to minority interests related to acquisitions. So I conclude, that this investment must be contained in "Other assets" under "Insurance and Other" [With no note to that post in the balance sheet], most likely accounted for under use of the equity method [to the opposite of line-by-line consolidation under the use of the past equity method].
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Somehow I find it a bit funny that buying 38.6 percent of a company with a turnover of USD 20 B now simply drowns in the Berkshire numbers. [Again, something may have skipped my attention.]
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I think BRK is the company they should buy. Stock repurchases are such a no brainer, especially at the current price.
I really hope that you do not get carried away too much here, Viking. [ : - ) ] I mean I would really miss your posts about the Big Four US banks going forward. [ : - ) ]
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shalab,
If one do that, then we aren't talking about book value any longer.
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Yet another poor letter, filled with horrible contradictions. ....
Please elaborate a bit about your line of thinking here, Ballinvarosig Investors,
It would be much appreciated, thanks.
Do I really need to go there?
There is just so much wrong with what Warren Buffett is saying these days.
For a start, he continues to beat the very worn drum that a basket of hedge fund, fund of funds will under perform an pre-specified index of his choosing. What's worse, is that he conflates that statement with the notion that all types of active management is bad. Not only that, but he states that in all his career (60 years plus of being in the market), that a maximum of ten people he has ever met can hope to achieve the goal of out-performing the index. It seems to me that he is in complete opposition with his previous teachings, namely that an investor with a small amount of capital has a very realistic chance of out-performing the market.
John Hjorth - I take it that you are an adherent of the cult of Buffett? If you are a devotee, then may I ask, have you adopted the advice of your protegé (excuse the pun) and adopted the index strategy? From the recent statements of Buffett, I think it's fairly clear that the circle of ten people that he identified as having the ability to out-perform the market are extremely unlikely to be inhabiting this particular discussion forum.
It seems to me that yourself and other adherents of Warren Buffett would do much better in your present investment strategies than to sell all your holdings and adopt index weighted holdings in the likes of Tesla and Snapchat, companies that truly represent the dynamism of American business (clearly, anything that is not American is abysmal by the standards of Buffet).
Maybe I'm wrong but in referring to the 10 investors, didn't Buffett say that he only has met 10 than he could predict in ADVANCE would beat the market? That is a very different statement from saying there are only 10 people that can beat the market.
Please do not put me in any camp.
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"Our aversion to leverage has dampened our returns over the years. But Charlie and I sleep well. Both of us
believe it is insane to risk what you have and need in order to obtain what you don’t need."
Add to leverage, aversion to high concentration, and this is a lesson from 2013-2014 that I am not about to forget.
When things go your way for years (almost 2 decades), delivering 10-20%+ above index returns (pre-leverage) and appear easy, you are highly subject to make over-confidence mistakes and to ignore some risks.
I also wish I had never heard of Buffett's bet that he could make 50% returns with a small sum. Setting high goals is essential in my opinion to achieve something great however, when ambition becomes too large it too makes you ignore some risks.
Cardboard
Cardboard, solid advice I need to pay more attention to...
Viking, are you in the business - at all - of using leverage?
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Nice one, Dynamic. I'm with you on extreme concentration in BRK. Nice to have the discussion on downside risk with Berkshire as "may not beat the index".
If you read it carefully, those considerations by Dynamic are - at least to some extent - short term beta considerations. [No critisism intended here, Dynamic.]. When you load up seriously on some position, the short term future will most likely be volatile, the long term future will tell you if your move was right or not.
I don't like to talk in terms of beta and alpha too much because I'd rather call it volatility in market price (instead of beta) and compounding of IV (instead of alpha). ...
I apologize for using CAPM nomenclacure here. Basically unintended. It will not happen again here on CoBF for my part. We are on the same side of this trade.
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Yet another poor letter, filled with horrible contradictions. ....
Please elaborate a bit about your line of thinking here, Ballinvarosig Investors,
It would be much appreciated, thanks.
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Two souls - one thought, Valuehalla!,
This is exactly the question I'm asking myself today with regard to Berkshire earnings power after tax going forward.
- Isen't BNSF a 100% US company?
- A part of the BHE business is UK based, right? - I'll hereby flash my ignorance, that I do not know the UK corporation tax rate.
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It seems like we overetimated the one-off deferred tax advantage, by putting it at USD approx. USD 34 B, while it is now reported to be judged at about USD 28 B. [The qualifications was about deferred taxes outside USA [not affected by the US Tax Reform], and the "dent" from BEAT, now reported to about minus USD 1 B, right?].
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Warren Buffett to retire from Kraft Heinz board.
I don't want to be a downer but this coupled with Abel and Jain being named vice chairs gives me a bad feeling that the Buffett era may be coming close to an end. We may get some big changes/revelations in the Letter tomorrow.
Nothing wrong about that, if its based on BRK corporate govenanence.
It could be a very good thing. If WEB's energy level or mental acuity are weakening, then we want him to concentrate what's left on the allocation of BRK's $109+ billion of cash. That's where he has a comparative advantage over almost everyone else on the planet.
Let somebody else sit on the Heinz board of directors to agonize over the best way to produce ketchup and Kraft Dinner.
SJ
I agree with StubbleJumper here. And I apologize for a low quality reply to rb here.
To elaborate a bit: Yes, somehow it's a bit sad, actually. But that's life - some day, it comes to an end for all of us - at least so far. [That may perhaps change over time going forward.]
Mr. Buffett isen't exactly a spring bunny any longer [despite longinvestor has called him a energizer bunny, that keeps on and on [ : - ) ]]. He has stated several times, that he loves his job. That job must be just daunting, despite he loves it. Berkshire is just so vast now. I suppose he has got a lot of support and help on the running follow-up on things from Mr. Hamburg now during many years.
So I see it as an initiative to reduce his actual workload - by delegation of responsibility and tasks - to two persons he trusts. To me, that's good thing, because it will reduce his tear and wear, likely making him last longer. That is what I personally want - to me, Mr. Buffett has deserved this.
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For more than one reason I would like to experience Mr. Buffett to do the mother of all Berkshire acquisitions [ ~ USD 100 B, perhaps?] before he retires. [ : - ) ].
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Warren Buffett to retire from Kraft Heinz board.
I don't want to be a downer but this coupled with Abel and Jain being named vice chairs gives me a bad feeling that the Buffett era may be coming close to an end. We may get some big changes/revelations in the Letter tomorrow.
Nothing wrong about that, if its based on BRK corporate govenance.
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...And after all that, the required response is whatever you want honey.
It's never going to happen here. I'm looking around though.
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Thanks race. Do we have summary from this years meeting?Yes, it’s in the DJCO section at the end.
To me, this is actually very funny! - Earlier today, I pressed on the download link provided by Joel, and *KAA-POOM* - down came nothing less than 912 pages in a pdf-file!
[ : - ) ]
Now - as so many times before - thank you - very much to you, Joel - for sharing your gems here on CoBF! [ : - ) ]
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Yes [ ; - ) ], I understood from a tweet by Shane Parrish, that he felt honoured by being interviewed to, and thereby included in the book. [ : - ) ]
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..."ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page. I called WSJ and unsubscribed."
You should subscribe instead to the Communist News Network. Definitely very anti-Trump.
Cardboard
Sure. What is not ok in my view is to not even want to read/know what the other side is thinking. Confirmation bias is that how they call it?I have noticed a huge change in what ABC, CBS, NBC and CNN present information since Trump. Has not prevented me from listening to what they say and to then form my own opinion.
Cardboard
Why not just post the second expression first, and then we all get along?
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I hope we can now get back to "Buffett/Berkshire - general news".
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Gardner, Russo & Gardner's Q4 13-F is out and they are reporting over 100 new positions(!). ...
Quite weird to observe indeed. - Especially if one look at those particular trackers. Incoming capital/accounts to be reallocated?
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To be released 20th April 2018 on Amazon in paperback.
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Nice one, Dynamic. I'm with you on extreme concentration in BRK. Nice to have the discussion on downside risk with Berkshire as "may not beat the index".
If you read it carefully, those considerations by Dynamic are - at least to some extent - short term beta considerations. [No critisism intended here, Dynamic.]. When you load up seriously on some position, the short term future will most likely be volatile, the long term future will tell you if your move was right or not.
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I think a lot of parts of the healthcare industry in the US are over-earning. The parts that are making things more efficient and keeping costs down are probably safe, but the parts that have seen rapid price inflation for decades probably will get on a new trajectory at some point.
Example: NVO 2017 ROE 80 percent. [Perhaps some board member may wonder why it's still not possible to see my shoe soles covering my butt with this one.]
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In all honesty, today I regret the topic title as the OP. The topic title is a far stretch. I started the topic to get attention here on CoBF to this initiative, that is now on the move, without having read just one line in the document.
I have read some of it today. Basically, no numbers about financing. Still, somehow the document makes sense to me. One has to start with the regulatory framework to get this thing up in the air.
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So, I hope that we can just continue to discuss this initiative - including sharing af background information - going forward with this topic as placeholder, despite it was started with a foul topic title.
I also hope that we can keep it relatively non-political, more with an investment angle. To me, with regard to that, so far so good. I always enjoy to read what my fellow North American board members think about society and living conditions.
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Canada is the same and after some overpass pieces have fallen on cars and even killed passengers a couple of years ago they have started making repairs. ...
This reads really concerning, Cardboard. Is it more or less the same situation in the different provinces of Canada, or are there differences among provinces?
2017 letter
in Berkshire Hathaway
Posted
I apologize, if my - totally open question, out of pure interest - was bugging towards you.
Three reasons stated here about why I'm stock picking, in stead of indexing:
1. I'm absolutely allergic to and anal about recurring fees. I haven't paid as much as DKK 0,01 [that's called one øre here in Denmark] in recurring fees since I switched to stock picking from 15 years of bond investing. It took me a lot of time to find the right solution for that back then - more than a year.
2. To me, stock picking isen't easy. That does not imply to me, that it's difficult. And difficult is here not the same as hard. It's just - at least to me - extremely work intensive, and time consuming. And I just happen to love that activity.
3. About indexing: Of the S&P500 constituents, the FAANGs fills about 11 percent. S&P500 earnings yield about right now is ~ 4.3 percent. You can take that, or not. If one don't, one has to work, by doing search and analysis. It's not impossible - even today - to find companies with positive growth prospects, considering carefully the downside risks - and at the same time with a postive judgement about overall quality, that have an earnings yield above ~4.3 percent.
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Furthermore, personally I distinguish quite sharp between Mr. Buffett, the Berkshire CEO & Chairman, and Mr. Buffett, the private US citizen & ie. taxpayer, venting his personal opinions publicly. For several months now, "The Snowball" has been open here for my part at p. 543 - "White Nights", with absolutely no appeal for me read on.
With that angle, your post makes a lot of sense to me, too.