John Hjorth

Cameron, I apologize for a non-constructive reply to you here. Mr. Buffet started from the start block with the first partnership with an initial capital of USD 105,000 from the limited partners [family members], and USD 100 of his own. With a 4 per cent watermark, taking 50 per cent of the total profit excess of 4 per cent. When he was extremely good at what he was doing at that time under such an agreement with the limited partners, he got totally extreme returns on invested capital in the early phase of the whole thing. One can actually say, that he was levered/amplified 1,050 times on the upside [105,000/100, and naturally still subject to the watermark], while at the same time participating in losses equally with his limited partners. His returns on his own capital account in the early years must been in thousands of per cents, however I have never seen any attempt to do the calculations, most likely because his withdrawals and capital injections to his capital accounts in the partnerships are still today not disclosed. Link. You have to to add the "X/42"'s in the agreement to understand the built-in profit sharing mechanism. This was for the first partnership.

This basic assumption for your post about the early partnership years is not correct, Cameron.

SA: Berkshire moves quickly on regulatory approval for Oncor. Expected.

Depending on the country.. here investment income is only taxed for dividends, not realized gains. ... And they call you socialists. It was tax return 2016 deadline for us - when your tax return is not trivial - owning foreign stocks falls in that category - 2nd July. I was really puzzled when I saw the outcome. Adjusted for inflation, I think I have go back to the last years of my time at university to find such low taxes for me. We have taxes on realized gains, but I'm a net buyer, and so far, I have not sold much. I haven't been working in a normal job for almost two years now. The Lady of the House is retiring finally at 1st August this year. Two years ago she went on a kind of temporary/reversible pension scheme called "Efterløn" [in Danish, in English translated to something like "After wage"]. I have presented to her just after I finished all the tax returns for the family a calculation, that documents, that she will not be subject to Danish income taxes payable on her Danish state pension [under the existing Danish tax regime, that is] for many years, perhaps I can defer those taxes directly into her estate to come some day. She is still asking questions about it, because she does not still fully understand it. I can hear, that she thinks it is just soo sick, that because you have cash to continue to build deferred taxes in retirement, so that she is not contributing - on running basis - to the nations common household. Then I try to divert her thoughts into another line of thinking, by suggesting that she could think about how smart I am instead. Then she walks away from me, telling me I'm a "hopeless specimen of male gender of Homo Sapiens - totally lost, absolutely no hope for me, a hopeless case.". Also I, like rb, have noted, that some fellow board members have used the term "socialist" in connection with some European states.

Great post, DooDiligence, Thank you for sharing your line of thinking. - - - o 0 o - - - Personally, I'm trying to take a break from the market and all the reading of financials right now, while trying to get some kind of structure on my investing, by trying to set up in writing for myself, what it is, I'm actually doing, and why. So far, I have found out, that I suffer from an attraction to B2B conglomerates, and float, i.e. insurance companies and banks. One of the questions I asked myself in that process so far, is: Why have I invested in Investor AB, while at the same time, right now I have no intention to touch Kinnevik AB.

... Here, we are told he was sharp e as well! I hereby nominate you as candidate for the CoBF poster of this week!

While reading a topic on my brokers blog yesterday, there was in a topic mentioned something about a Danish finance professor, who has analysed the alpha of Mr. Buffet. After doing some search I found this topic about it, and the link in this topics starting post to the old article on SA. Unfortunately, the link to the research paper in the SA article is dead. I found the research paper on Lasse H. Petersens personal website. If you click on the "Warren Buffett" link in the end of the fourth paragraph, just left to the image of the book, you'll get the research paper. It's an empirical approach to analyzing the return Mr. Buffett has generated at Berskshire for a period of thirty years. If you can get your head around the talk about beta and sharpe ratios, you will perhaps find this piece as interesting as I did yesterday.

France may close up to 17 nuclear reactors by 2015 - Hulot. Oh well, - I suppose the private shareholders of E.ON and RWE are standing on the boarder between Germany and France, waving with the flags: "Welcome to the club!" - to EDF shareholders.

Off topic: Welcome Ulrik! : - ) - Now back to topic.

Received the book today from amazon.com! [ : -P ] - No matter the weather, the weekend to come will be good, based on the recommendations for the book on Amazon. I apoplogize for posting about you, Jeff, in third person before in this topic. I did not know your activity level reading the board. In the OP by Joel he called you a CoBF lurker. - - - o 0 o - - - I tried to order the book at amazon.de [to get it faster], but the prices there were screaming to me - really odd experience -, so I backed out there and bought it at .com, directly from Amazon.

Mr. Buffett's total gifts in Berkshire stock now up to USD 27.54 B.

To me, a good deed.

Started a small position in JPM today.

I am sure! :P Odense, Denmark Time to give this one a spin again! There are a lot of active CoBF newcomers since last post! - I mean, just about nobody is posting in "What are you buying today?". For my part, personally, it would also be appreciated, if you would update your forum profile with regard to your location. In many aspects, it makes understanding your posts easier. Thank you.

Reuters : Elliott says considering a USD 18.5 B deal for Oncor. This will be interesting to follow going forward.

Thank you for the last two posts of yours, globalfinancepartners, - they are very good, I have just read the major parts of the merger docs this morning. I'm just so impressed, that it gave me goose bumps. Simply put, to me, it's a slam dunk. This deal solves the whole situation with EFH Corp. being in bankruptcy since April 2014 and at the same time moving Oncor into safe harbour, backed by the regulatory bodies. EFH Corp.'s owners have now had more than 3 years to solve the matter - which mean: They can't. There is a cat flap for EFH Corp. to get out of the deal in the merger docs [termination fee of USD 270 M]. So where does a company under bankruptcy proceedings find a saving angel with access to at least USD 9.27 B that at the same time can get consent from the regulatory bodies, who have already expressed an positive opinion to Berkshire? - To me that is highly unlikely. Edit: With regard to the EFH bonds owned by Berkshire: 2011 shareholder letter, p.4 : The bonds were bought for about USD 2 B "a few years back", relative to February 2012, written down by USD 1 B in 2010 and further written down by USD 390 M in 2011.

Um, BRK invested in the TXU LBO bonds and lost $900mm. And Buffett didn't include the opportunity cost of deploying that $2B into safer investment or even a risky investment that didn't blow up. He counts the dividends received against the price paid. Hmm. they will recover the 900m and opportunity cost. And some. Not written off yet. This is one way to recover losses. Didn't Mr. Buffett dump the bonds at a loss, thereby calling it a day with this mistake? [sorry, I'm getting lazy here - I'm actually sitting under the parasol with the Lady of the House right now with a glass of wine rosé, and it's Friday evening here right now.]

Thank you, globalfinancepartners, I have now adjusted the calculations in my post earlier today accordingly.

Are there any NOL's or similar offsets in play here? I don't see any information about NOLs in the notes or balance sheet, longinvestor. There is USD 2.788 B "utility float" [deferred taxes] in the balance sheet, not bad at all. The tax situation for Oncor is hairy, based on what mess Oncor is part of right now, ref. the content of note 12. Berkshire has really been fishing in white waters here.

Attached are the 2016 Oncor financials. Just a few observations after a first glance: Cash flow from operations 2016: USD 1.429 B [for the whole Oncor]. Goodwill in balance sheet: USD 4.064 B [for the whole Oncor]. Membership interest [equity]: USD 7.710 B [for the whole Oncor]. Cash outlay, ref. news release: USD 9.000 B [for 80 per cent of Oncor]. Implying goodwill for BHE before purchase accounting adjustments under past equity consolidation method : [uSD 4.064 B + USD 9.000 B - [0.8 x USD 7.710 B]] = USD 6.896 B. [All based on if the transaction took place 1st January 2017.] - - - o 0 o - - - Please also note the debt [notes] in note 7 at USD 5.510 B. Just the refinancing of this debt going forward for Oncor under Berkshire & BHE umbrella will generate several millions in interest savings every year, the clip of the refinancing steps naturally depending on the terms for early redemption of the existing notes. Edit: To me, this already looks better than a pile of T-bills worth USD 9 B for Berkshire. Oncor_Financials_2016.PDF

Valuehalla, Aren't you confusing EBITA with EBITDA in your last post? I see a net income 2017Q1 of USD 73 M on page 5.

News release of today from BHE, that the deal has closed, subject to the usual approvals. [Also posted in the general news topic by globalfinancepartners.]

Personally, I agree with Greg here, and to be totally honest, very. Jeff did not do anything wrong by opening this poll. Please be nice to newcomers on this board, or this board might perhaps die no later than when you die! [<-Something to think about?]

News realase about the BAC preferred swap to BAC common from Berkshire, dated 30th June 2017.

The world's best beds! - Right in front of you - Listed on NYSE. They have a sub here on the Danish island called Funen, where I live. It's a totally outstanding sub - generating three figures DKK M profits pretax every year! It's on the top list every year of the best performing Danish companies. - - - o 0 o - - - As with everything else - also stocks - you have have to pay up for quality - here, for a bed, dearly!