bizaro86

This kind of got lost in the news about the repurchases. Does anyone know how long it takes before the S&P recalculates the free float shares and increases BRK weighting in the index?

No worries at all. I find this news quite exciting (both as a Berkshire-follower and for personal financial reasons) so I may not have expressed myself very well initially. That seems especially likely given that two respected members interpreted it the same way, so obviously I wasn't clear.

I haven't looked recently, but the last time I checked the installment receipts were trading at a decent discount to the shares, especially given the higher yield until the deal closes.

Hmm... I don't think I disagree with you at all, or that an assumption that I have not valued Berkshire recently is valid. My very recent purchase on a position in in-the-money leaps is one example of that. As a matter of fact, my exposure to Berkshire has tripled in the last month, so my timing appears to be fine. As to valuation, I agree that this isn't the same as saying it's worth 1.3x, and that was my point. If he says 1.3x or 1.4 or 1.5, then the stock will immediately trade up to that number limiting buybacks. If he just says "when it's undervalued" they can buy back at 1.35x or 1.62x or whatever, and actually use it as an opportunity to deploy some cash. By giving the market less information about their intentions they are likely able to buy back more stock. I certainly wasn't saying intrinsic value is 1.3x book, and honestly don't see how my comment could have been interpreted that way.

I would guess they don't change the number to 1.3 because then the stock will automatically trade above that number. This sounds to me like they are planning to do a buyback and want to actually be able to do so without driving up the price.

If she "gets" compound interest, the eyes wide at 12% returns moment is a good time to slide in "imagine how bad it is to pay 19%" for credit card debt. If you can get someone the motivation to save a reasonable percentage of their income at a young age, that alone will put them way ahead.

Think about it from his perspective. He probably got tons of extra publicity/client funds/higher fees from being the guy with the $2000 book. It could have been him bidding up the prices and it likely would have been a good investment. Maybe he could make $1MM by offering reprints, but that pales in comparison the value of the aura he's created.

I'm definitely interested in being the best I can be at my chosen activities. Happily, nothing that I spend time on is likely to end up with me being famous, even if I were to be very very good at it. For the board, that includes investing. It seems to me that even if I could generate returns similar to WEBs partnership years for the rest of my life, and while my IBKR balance would be really high, I don't see how that would result in being famous. Unless you started giving interviews or managing public money as long as you stayed below 5% holdings you could stay anonymous.

Maybe I'm just an introvert but I think being Tom Brady level famous would be terrible. Every minute of every day you'd have to be "on" which would get old fast. I love the wife and kids I have, and have more money than I need. What possible benefit would there be to being famous?

You need to know occupancy to estimate a value, which could be poor given the hotel is new and ramping up.

So, functionally, what are you proposing? ..... Nothing. I'm not an auditor, accountant or regulatory expert. Just making the comment that instead of another 200 pages of prescriptive rules, an incentive change is likely the best solution. I don't claim to know how to do that, which I tried to make clear.

Not my rant, but I think one way to improve it would be change the incentives. Right now the right call for a firm that finds a fraud based on their self interest is to just dump them. I'm not sure how to do that (fines?) But it seems like that'd be the right place to start.

My understanding of the overcontributions made by current workers is that they're basically covering past shortfalls. Ie, they switched from mostly pay-as-you-go to a pre-funded model, and so current workers are paying for their own pension plus current retirees. I do imagine if CPPIB continues to rock that eventually someone will conclude that lower premiums and/or higher benefits would be politically popular. If they pick higher benefits I personally hope they only pay them for years worked past the switch to higher contributions in the 1990s.

YOLO. Should have told the guy with the $5b in margin about this one.

What do you mean centralized? Every major Canadian city and many minor ones has a university. The vast majority of the population lives within commuting distance of at least one.

The videos have the transcripts underneath them (and the videos are synced with them - clicking on part of the transcript will skip to that part of the video and vice-versa). From what I can tell, all of them have transcripts. Thanks!

Are there transcripts? I only saw videos. Since transcripts are at least 5x faster for me and I have better retention reading than listening... I couldn't find them, link/directions would be appreciated.

I think if you reset Vancouver/Toronto real estate prices to reasonable US comparables (say Chicago and Seattle) that would make a pretty significant difference to the outcome.

It 100% would tank the stock, at least in the short term. There would be a huge additional supply of shares in the hands of buyers of the prefs close to Par. Those aren't people who want Dundee common, and many of them will sell indiscriminately. The stock is well below $2 right now, and volume would be up and price would be down post a conversion, so a big tender then would be timely. There are lots of examples of companies converting income securities to common (usually debs) in the Canadian market, I can't think of one where the stock didn't decline badly in the short term.

How venal are these guys? From the perspective of the common/remaining prefs it seems like the best option would be to cash out the shares with equity at $2, given that equity is grading at $1.69. That much dilution would tank the stock, so you could probably do a tender and get most/all the shares back for $1 to $1.50, which is potentially pretty accretive.

I agree. I am no t even sure it is a great idea to leverage, when the market is falling. I believe the sweet spot would be when the economy is already recovering (GDP growing again) and even though the market had bounced back 30-50%, the market looks cheap, because the fundamentals are looking better. In terms of the financial crisis, that would be around 2010. By that time, you could also get really cheap mortgages, assuming you had sufficient equity in your home. I added some levered money in late 2008. It worked out well in the end, but spring 2009 was mentally very tough, and it wasn't that much money involved. I wouldnt use margin debt in a similar situation again, just funds from a Heloc or refinance.

This doesn't seem like the right point in the market to be betting your house on a leveraged bet on equities, even Berkshire. I'm wrong often enough that I could be wrong about that, but I like to leave high levels of leverage for when I'm really, really sure.

That's why I keep a spare Heloc or two around... Good idea, I should secure one of those. What do they usually charge if you don't use it? Nothing. That's in Canada though, may be different in the US. Prime plus 0.5% is the rate, interest only payments.

That's why I keep a spare Heloc or two around...

Sunset clause means inertia will kill it. Some president won't bother renewing, or won't get trade authority, or whatever. Cancelling is a change you have to actively make, which is politically harder because you have to defend it at the time.