james22

I hold BRK, MKL, and FRFHF. And always consider BAM, L, Y, LUK, GLRE, and TPRE. I'd probably add to BRK and FRFHF today (quality, valuation) but not to MKL or BAM (valuation) or L, Y, LUK, GLRE, or TPRE (quality). Edited to add: I'd consider OAK and PSHZF too, but don't want to deal with K-1 and 8621 forms.

I agree with that. However you could make the exact same statement that you just made back in late 2007. Then 2008 came and the best thing that you could have done in late 2007, given Fairfax's thesis of overvalued markets, is to hold no equity whatsoever... including that of Fairfax. But you were relatively better off in FFH if the gun was put to your head to be in the equity markets. Fairfax works as a hedge for me both ways - relatively better off in a crash and better than cash otherwise. And I'd like to see Fairfax buying quality too, but I'm happy they didn't buy BRK at 1.27 P/B last month (for example) for the same reason I didn't: while quality at good value, given a thesis of overvalued markets, the best thing to do is to hold no equity whatsoever. This probably about right: http://www.cornerofberkshireandfairfax.ca/forum/fairfax-financial/watsa-on-share-buybacks/msg112515/#msg112515

Yup.

20% "pull back" ≠ sky falling I own Fairfax as a hedge against a 50% crash and so give them full credit for their conviction.

The velocity of money has turned lower… and since 2008 and 2009 when we started to see deflation, the Fed and other central banks have declared war, hell bent on wiping out deflation and foregoing debt deleveraging through massive QE. As of last month, inflation is zero. Some war! http://www.businessinsider.com/us-on-fast-track-to-deflation-2015-10

The world has been in a deflationary cycle since the collapse of Lehman Brothers Holdings Inc., evidenced by the euro, crude oil and a gauge of average commodities futures prices all peaking out in 2008, while risk-asset prices are merely buoyed by aggressive global monetary easing, Wakabayashi said. As the accommodative policy has failed to end global deflation and artificially inflated risk-asset values are running out of steam, the dollar’s strength is reminiscent of the yen’s appreciation that hurt the Japanese economy during decades of price declines, he said. “The U.S. will have to eventually resort to a weak dollar policy as deflation deepens,” Wakabayashi said. The Federal Reserve has held rates near zero since December 2008 to boost the economy through the worst recession since the Great Depression. “It’s obvious the U.S. is headed for deep deflation, hurt by the strong dollar,” said Wakabayashi, 72. “The Fed raising rates in this environment is not only ridiculous but harmful. U.S. stocks are plunging, not because of the prospect of a Fed rate hike, but to prevent it.” http://www.bloomberg.com/news/articles/2015-10-01/strategist-known-as-mad-dog-says-yen-can-climb-to-100-per-dollar

http://www.gurufocus.com/news/146183/berkshire-hathaway-is-now-traded-at-the-lowest-valuation-in-decades#146504 Lol, what are the odds, poor guy. :D (It was 2000 btw and not 1999 but oke.) http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/brk-buying-back-stock-110-of-bv!!/20/ Funny. I bought the day of the last buyback: http://www.early-retirement.org/forums/f44/brk-again-64054.html

Hussman...

Ah. Thanks, M.

How can book value not reflect the change in cash and debt as well? I do believe P/B is positively impacted, but only because I believe $1 of PCP/KHE > $1 cash. Again, I did just add to my position, believing BRK's listed P/B of 1.38 really now below the one-year P/B low of 1.37 (though that only the median P/B since the last buy-back announcement). (Probably too early, but I'd too much cash/not enough patience.)

I don't think it [P/B] really changes. Cash down, debt up, assets up...balancing. http://boards.fool.com/bv-after-pcp-31867693.aspx?sort=whole I did just add to my position today.

BRK's safety makes the position size less an issue for me. And while cheap, I've been waiting not for something else, but for a market correction (bear/crash) that would make even cheaper. Seems overdue, but maybe it silly not to add at P/B 1.4 whenever can?

What strikes me as new is the overvalued market which makes BRK look relatively unique: Conclusion: Berkshire Has Everything I Look for in a Stock: It's Safe, Cheap and Growing at a Healthy Rate Extremely safe: Berkshire's huge hoard of liquid assets, the quality and diversity of its businesses, the fact that much of its earnings (primarily insurance and utilities) aren't tied to the economic cycle, and the conservative way in which it's managed all protect Berkshire's intrinsic value, while the share repurchase program provides downside protection to the stock Cheap stock: trading 22% below intrinsic value, without giving any credit to immense optionality, with 42% upside over the next year Intrinsic value is growing at roughly 8-10% annually Seems few safer, cheaper, faster growing alternatives.

Any thoughts?

Whitney Tilson: Berkshire Hathaway Now Worth $275K A Share A Safe, High-Quality, Growing Company With 42% Upside Over the Next Year http://www.valuewalk.com/2015/08/tilson-berkshire-hathaway/

David Stockman CNBC Interview: Tops In—–Next Comes An Epochal Deflation http://davidstockmanscontracorner.com/david-stockman-cnbc-interview-tops-in-next-comes-an-epochal-deflation/

Likewise: "The Worldwide Credit Boom Is Over, Now Comes The Tidal Wave Of Global Deflation" http://www.zerohedge.com/news/2015-08-03/worldwide-credit-boom-over-now-comes-tidal-wave-global-deflation

Thanks, Dazel.

FRFHF @ $475

Quality Minus Junk http://www.econ.yale.edu/~shiller/behfin/2013_04-10/asness-frazzini-pedersen.pdf

VGPMX at 10-year low, 80% off high.

The long-lived exception: if wealth was such that risk or return didn't matter, could go 100% BRK/SV index fund or inflation-adjusted annuity/treasuries.

There's been an slow over-reaction for a long while already, purportedly due to concern over the transition. This is much more of an opportunity to go 100% into BRK. For those who would like to, can rationally do so over time. I'm one such, surely there are more out there. The headline like opportunity that you're talking about will be short-lived and the 100%ers are not likely in that pond. There not many arguments for 1 position portfolios, given the free lunch of diversification, I'd think there more headline-like than rational-over-time 100%ers. But just answering the posed question: nothing has yet happened that would put me 100% into 1 position, including the long-while BRK opportunity. Only something like the short-lived example would.

Even in today's overvalued market, I'd go 100% BRK if it dropped to book value with Buffett's passing as I'd believe it an overreaction soon corrected.

Being early is indistinguishable from being wrong.