KinAlberta

Seems like the insider trading scandal didn't stop there. There's the little thing about hiring someone from the DNC after they were outed as an inside 'traitor'. :-)

As an aside, back as far as the 1970s Buffett's has been making interesting comments on excess pension return projections. Some googling should bring up the discussions.

I'm a "natural born Citizen" of the US and I don't get it either. The constitution says "No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President" Why is someone who is born outside of the US definitely not a "natural born Citizen" of the US? As long as one of your parents is a US Citizen doesn't that make you a "natural born Citizen" regardless of your place of birth? Obama's mother was born in Kansas, that should be the end of the whole issue. Well, it's not certain but part of my father's family tree may go back 300+ years in the US (so that should count for something) but my dad was born in Canada to an American parent, and so was I born in Canada, but apparently I could still apply and get US citizenship due to grandfathering of some old legislation. So folks, when I run I promise to be nothing like your current two candidates. :-)

Gary Gordon here seems like a pretty level headed guy. His latest article was interesting in drawing parallels with the pre-financial crisis situation with banks. Shows what people are thinking. Note: It took a couple years but I'd say he's now firmly in the Hussman camp in terms of prospective returns. The banking sector's exposure to who knows, questions as to their "too big to fail" / bailout certainty and the fact that people own these ETNs should be concerning to those investors in my mind.

Excluding the odd war, do Presidents actually have much power to change market economics, or is it only the perception of change that moves the markets. That said, I used to be a cynic and think the Fed had only temporary, cursory influence outside of the rare short-term extreme initiatives like Volker took but otherwise pretty much sought to take credit (no pun intended) for 'nudging' changes in the face of natural market movements. I think I've been proven wrong over the last few years of ZIRP. :-(

Potential Trump University student. "Better city with a better view"? You're showing your personal bias. :-) Plus Warren's been there, done that hasn't he? Plus, Warren's long had the option to live where ever he wanted. Trump though has likely had to stay pretty close to where his lenders, claimants and courthouses have been. :-)

I'm so glad I'm a Canadian and don't have to vote in this election. As for trusting Trump in running Berkshire. I would be selling if that came to be as I don't get the impression that he sees anyone anywhere as a partner.

Some Deutsche Bank Clients Reduce Collateral on Trades William Canny September 29, 2016 http://www.bloomberg.com/news/articles/2016-09-29/some-deutsche-bank-clients-said-to-reduce-collateral-on-trades

Does anyone have any experience with ETNs? During the global financial crisis I didn't buy one I liked because it was a note. The bank offering it was Deutsche Bank. (Which is now in the news with questions about its survival.) I wasn't sure if my fear of a lack of guarantees was rational or not, but I've stuck to buying ETFs and avoiding ETNs. http://www.investopedia.com/financial-edge/0213/etf-or-etn-whats-the-difference.aspx https://www.elementsetn.com/ElementsETNUI/Morningstar-Wide-Moat-ETN.aspx

I see that this thread hasn't been updated in a while. (Always admired Whitman and used to read everything he wrote. Haven’t seen much in years though.) Also a truly classic interview had him, in late 2008 or early 2009 I believe, talking about the irrationality of the market panic, credit and bank share pricing and critically, pricing that wasn't factoring in all the flexibility embedded in FASB’s SFAS 157 / 159 derivatives marking rules, specifically the observable / unobservable events criteria. Recall that at the same time others were talking about such creative FMV adjustments like 'mark to maturity'. :-) Also note that John Hussman pins the 2009 market bottom as basically the day or so surrounding the change to the FASB rule. Anyway, here's a missing reference: Marty Whitman’s 2Q15 Letter: GAAP Vs IFRS By VW Staff on June 10, 2015 http://www.valuewalk.com/2015/06/marty-whitmans-2q15-letter-gaap-vs-ifrs/ one more: http://www.valuewalk.com/2014/09/marty-whitman-third-quarter-letter-to-shareholders/

Which downturn? Did I miss anything? I think he meant up-coming downturn, but he/it won't come because of Hillary. So there is a downturn because it's not coming up. You know what I mean, eh? 8) All I know is that in advance preparation for a downturn, I won't buy much into companies with a lot of dry powder expecting that one, the cash will protect their share prices, and two, they will actually deploy that dry powder. With only a couple exceptions, I got burned on both fronts in the 2008/09 market dip. My own dry powder (80% + cash by late '08) is what allowed me to buy more of the dry powder companies, among others. I was very disappointed in how little opportunistic behavior took place among the cash rich companies I held. It was like people that buy gold for crisis protection. The crisis hits and they are too afraid to sell it, thinking that the crisis will only get worse. So they forego revenue on the way up, then ride their commodity right back down. Same seems to hold for those keeping cash in the bank.

I have to agree, yet, this is so widely known and expected, I just can't see any small change doing anything to market valuations. I think noticeable sharp corrections tend to occur when something broadly unexpected happens. After the fact the predictors of which are dug out of the woodwork and promoted in the media. Beforehand though, their warnings get ignored.

Google news? Do you mean the one in Google finance? If so, I find that that is now cluttered with crazy garbage cutting its utility to me in half. I used Bloomberg Professional for years. Now that had great comprehensive business news. I wish the had a low cost public version.

A broken clock is right twice a day. If they keep peddling these conspiracy theories , I'm sure some will ultimately stick. I hope you apply these principles in investing too. Just because you picked a winning stock doesn't make you a great investor . In the long run your process will determine the results. I always find it amusing to be lectured my someone with a fraction of my life experience. As far as my financial welfare please don't be concerned, I'm doing just fine. Buffett reportedly reads extensively. He has a process and ignores a whole lot (macro forecasts, likely almost all all forecasts for that matter) but he's reported to read a huge, huge amount. I figure the trick may be to read, read, read, so you have a whole lot of exposure to what's going on in the world and maybe even be able to identify a trend early, but also so little surprises you. If you want to avoid mistakes and prevent being blindsided and ambushed by reality, you take it all in, but reserve judgement on everything you read. Scuttlebutt is just that, scuttlebutt, until confirmed.

When it comes to insider trading reporting, all I think I know is that CFO actions may be indicative of something but not much else of value can be gleaned from the numbers. However, what are your thoughts and experiences (and hopefully references to reasonably rigorous studies)?

Skimmed something recently on seeking apha about bitcoin. Mentioned FMRO and possibly Overstock, one or the other seeking to buy free optionality on bitcoins future. Since it's so hard to predict the tech winners, finding sources of free stakes in various games might be a way to build a portion a portfolio to capture such dramatic change. Wasn't that how LUK lucked into investing in iron ore in Australia? I'm back. Sorry, it's all rather off topic but here it is: http://seekingalpha.com/article/4000580-invest-bitcoin-related-companies

Long ago, Buffett had a few things to say about performance vs the indexes:

Ft. McMurray's wildfire could be tied to El Nino. Not sure what La Nina could do.

It might be more interesting and maybe even more insightful to look at the auto market in terms of high-end vehicle prices, numbers or whatever, and not used prices of Camry's etc. I think its the high-end that attracts the more careless, levered purchases from among those that come into new money (fracing/fracking workers, etc.), higher cash flows, etc. in bubble sectors. I may have mentioned this somewhere else on this site, but I live in Canada and it's population is roughly 1/10th that of the USA. So a general rule of thumb I always used was simply to multiply by 10 or divide by 10 to get rough equivalents in either country. It worked for a lot of things. Consumers in both countries are generally the same and want the same things. However, I once figured out that the number of Hummers being sold in the States wasn't 10 times greater, it was 100 times greater than in Canada. Incredible! Shortly after I first heard the concept that Americans 'were using there homes as ATMs'. So rightly or wrongly I connected the dots and added one more piece of anecdotal evidence to the idea that a market collapse could occur.

Reminds me of the Buffett talk on Long Term Capital Management. (Hilarious that they called it "Long term") If Warren Buffett ever writes a book it will be called: "Why smart people do dumb things" Buffett 'couldn't imaging an equation where it made sense'. So start watching at the 15:55 minute mark: Warren Buffett speaks with Florida University or start watching at about 3 minute mark Warren Buffet y LTCM Inversion 2/9

With cars, people only need one or two vehicles. They don't buy 8 or 10 or 20 on spec as they would in a housing bubble. Moreover, after the 2008 crisis banks have recapitalized and are apparently much tighter so I can't see a domino effect reoccurring due to auto loans. I wouldn't see this as a canary in a coal mine. What I've never seen discussed in terms of the 2008 housing crisis (2007-2011?) was what happened to the overhang (if there was one) in investor owned housing. All the focus was on the poor people that got sucked in by teaser rates and then couldn't handle the resets yet one half-successful but over-levered investor could easily equal 10 poor credit buyers. Moreover, cities had massive overhangs of unfinished condo units etc.* so I wouldn't have been surprised if there were thousands upon thousands of people that went under by leveraging up to buy multiple rental units that couldn't be unloaded to meet their cash flow needs. * I believe at the time I read where Miami had 13,000 or was it 30,000 unfinished condos when the collapse occurred. anyway, it was some amazing number of units under construction in anticipation of the bubble getting even bigger.

That's pretty much it, though I'm not suggesting that they necessarily buy BRK either. They may not only be buying other companies for worse valuations but they are performing worse valuations in determining the value of others, but then relying on Buffett's price for bRK. I'm just thinking there is some kind of disconnect in reasoning going on in the market, simply because Buffett laid out his price for BRK, and only BRK. They are accepting his reasoning for BRK valuation but not using it elsewhere. (Is it that they think a 1. whatever P/BV pricing/margin of safety methodology could only apply to BRK and not say a GE. A Buffett quote, 2000 AR: “Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and even growth rates have nothing to do with valuation except to the extent they provide clues to the amount and timing of cash flows into and from the business.” I'd say, unless the cash flows are quite stable and predictable.

KinAlberta, We discussed on the 6th of August in this topic. Thanks. Also, I couldn't find the right words or example but I'll take a shot. It's not just the idea of a ceiling on BRK specifically, but that a very well thought out "rule of thumb" is being used for a great company that doesn't seem to come close to being applied to many other companies. I.e. If there were two identical companies, twin sisters, out there and solely because of what Buffett said about his, it was trading slightly over his P/BV pronouncement, but it seems that in today's market the twin sister would happily be trading at say 50-100% more expensive ratio. It all seems to throw sand in the face of the efficient market hypothesis. People that would buy BRK instead are doing a poorer analysis on other companies and choosing to pay relatively more for them, all because of the asymmetric information out their which is solely Buffett's idea of a great value. :-) Sorry, for the so poorly expressed thoughts.

So, this may have been discussed elsewhere but did Buffett put as much of a ceiling on the price as a floor? i.e. Are you using lower standards on other lessor quality companies while waiting for Berkshire to trade close to 1.2? In other words, what other companies (with comparable and predictable earnings power, product durability, "fortress like balance sheet", etc.) trades close to a P/BV ratio that Buffett would see as a decent buying price? And if if does, are you buying? Here's an article from 2011 somewhat in line with my thinking on this (though I'd wonder if the quality companies in the S&P outweigh the failing companies to the extent that 1.1 or especially 1.2 would be low enough) http://www.bloomberg.com/news/articles/2011-09-27/buffett-buyback-shows-s-p-500-passes-berkshire-book-value-test

You're right, it has really gone to shit lately. Maybe VZ will restore some glory. You can get a quick update on moves and similar scan of relevant breaking news using seekingalpha's portfolio feature. They're all going downhill. BBC, Bloomberg, etc. have all added big useless token photos. It could be an article on the decline of text and they'd put a big picture of a "A" or something useless up.