Parsad

Blockchain would allow transactions with no intermediary...no merchant fees, no delay, direct one-to-one transactions. You pay the merchant directly...no intermediary charging the merchant 2-3% on each transaction. The funds would transfer instantaneously with no withholding or delay to the merchant. The transaction would be completely secure. There may be nominal fees from the blockchain company holding your wallet, but the fees would be far less than the 2-3% charged by V, MA and AXP now...or the fees charged by Paypal, Square, etc. Where the credit card companies/financial institutions would still rule is on the ability to use credit cards. Those that don't have enough in income or capital in their wallets, would continue to borrow on their credit cards. An exchange organization like Interac would be ideal for blockchain, since they have access to all of the merchants and already charge a nominal fee far less than credit card companies. The lower risk of contingent liability reduces transactional costs even further using blockchain. Recommend reading this article: https://www.frontiersin.org/articles/10.3389/fbloc.2020.00024/full There are a number of other articles/studies out there also worth reading. The one thing almost certain is that blockchain will reduce transactional costs dramatically. Cheers!

Absolutely! This is where the likes of blockchain will disrupt the huge moats of financial institutions, clearing houses, brokers, etc over the next 20 years. Even businesses like Paypal, Square, etc will be vulnerable. These financial institutions will have to offer more than just transactional benefits, but other services that would not have been disrupted or new services to lock-in their client base. That's what Apple, Google, Meta, American Express, Visa, etc, are all doing...they are locking in the users of their current services with other unique services. But the shift to blockchain will be the main disrupting influence...direct transactions...zero/nominal cost...instantaneous...fraud proof. Ironically, banks may be more shielded than the likes of AXP, V, MA, because consumers will still need savings accounts/deposits and mortgages/lending. Cheers!

I think almost all of the insurance businesses are also carried for much less than they would get...the 10% sale of ORH was a good example. I would guess that book value of the company is underestimated by at least 20%-30%...that's how much more they would get if they sold the insurance businesses and other little pockets of value like Digit, BIAL, etc. Cheers!

I believe Ted paid $5M for two lunches...so he got an even better bargain per lunch, plus the job! In terms of who I would pay to have dinner with...Einstein and Gandhi, yes...Jordan, no. Would rather lunch with Steph Curry, Patrick Mahomes or Peyton Manning...they would be fun! Would also pay to lunch with Roger Federer or Nadal. I did buy a lunch and round of golf with Gretzky, but then the damn pandemic came and never got to enjoy it! C'est la vie! Cheers!

Buffett's willing to pay higher, but he's not expecting at least an annual return of 15% on those purchases. He's probably aiming closer to 12-13%. Cheers!

I think they can do 12% for the next 10 years...that's why I use a terminal growth rate after that of 6%. Yes, 15% is possible, but certainly wouldn't be a conservative estimate. So based on my reasonable assumptions...$400K/A share is fair value. Anything below that gives you a greater margin of safety. Also, I'm calculating intrinsic value an easy way using a range of earnings on book value. The proper way to value Berkshire is to separate earnings from insurance and non-insurance operating subsidiaries. That will give you a more accurate number, but I bet you that I'm not far off using my more simplified method. Cheers!

Thanks Daphne! Did anyone in their right mind think that the pet insurance business owned by Fairfax was worth $1.4B? I certainly didn't! Cheers!

Berkshire has about $520B in equity...do a discount cash flow analysis at 8% ROE and 12% ROE...that's a reasonable earnings range for Buffett to hit with the size Berkshire is at now. You want a 15% ROI and growth rates on earnings of 12% and 15%, with a terminal growth rate of 6% after 10 years...this assumes that after Buffett, the two Teds and Greg Abel aren't going to be as good as Buffett, but still good. The 15% ROI is your margin of safety. With $120B of debt...you get a low of $413K per A share at 12% earnings growth to $845K per A share at 15% earnings growth. Can they do 15% earnings growth at BRK going forward? At its size, I find it hard to believe, and we know Munger has hinted that Buffett's target is lower now. So 12% is probably the more reasonable target. So Berkshire today at $403K per A share is in the range of fair value with a relatively conservative expectation and a margin of safety. Is it 1999/2000 or 2008/2009 cheap...not even close. Will you get a reasonable return...probably better than the S&P500 long-term...yes. Cheers!

Everything is based on "Graham & Dodd" cheap. That's why Buffett didn't buy Costco as Munger said...he thought it was too expensive. If you are a Ben Graham student, it makes no sense to buy BRK at 1.3 times book when you can buy other stocks at a much cheaper valuation and with a greater margin of safety. Even if they are lesser quality businesses. Graham and Dodd works! By the way, I've owned Berkshire on and off for over 23 years now...I know as well as anyone when it is cheap and when it isn't. And as a Ben Graham student, I can't buy it simply because it is a quality business...it has to be cheap and have a margin of safety. Now if you are buying in a taxable account, then that changes the narrative slightly, because you have taxes to deal with. In that case, buying higher quality, long-term investments may end up being the better alternative to buying cheap stocks and then paying taxes on them as you sell and buy something else. Cheers!

Looks very refreshing! Especially on a nice sunny day. Enjoy! Cheers!

Compared to the hit many other quality companies have taken, BRK is still not cheap. It's about where BRK starts to buy back, but not "margin of safety" cheap. It would have to get closer to book value. Until then, there are other businesses that are much cheaper. Cheers!

+1! Getting cheaper, but not where I would buy yet. Cheers!

Does that cardboard holder carry just one can? I like the frosted mug...no better way to drink beer...or even root beer! Cheers!

https://finance.yahoo.com/news/1-bidding-tops-12-3-162324883.html Cheers!

Thanks Lemsip! Cheers!

Manhattan was also sold for about $24 of beads and trinkets, but I don't think that would work now for a global monetary system. The barter system has existed longer than currency. But the barter system would not work efficiently on a global basis. I've owned a chunk of a barter exchange (ITEX) and while you can trade services for services through ITEX's currency, it is not something that could be adopted on a national or global scale...simply because most of the world would not sell their products for ITEX currency, because they could not go and use it everywhere to buy what they need. BTC is a derivative of barter or similar to ITEX currency. It exists as a form of currency in a small exchange, but not one that is particularly useful on a global level. It has also showed far more volatility than even something like ITEX currency, let alone gold or fiat currencies. Instead of being an asset of choice during a liquidity event like commodities or treasuries, people flee BTC and other current crypto. I think investors would be better off buying the infrastructure companies around blockchain, than buying crypto itself long-term. Own the highways, not the cars! Cheers!

Bill, do you know what is the total amount Buffett has donated to non-profit organizations to date, since he started giving shares to the Gates Foundation? Cheers!

There is nothing backing BTC...no utility, no tax revenues, no assets, no gold, no fiat currency...only scarcity. If something is scarce, but has no utility and value...what is it worth? How much would you pay for peanut shells if there were no peanuts? But even peanut shells has some use as ground up filler, compost, etc. BTC has nothing...nada, zilch, zero value or utility. Blockchain is real! It will be the next wave of disruption over the next 20 years. There will be future digital currencies using blockchain. I just don't see the current batch being the winner, and if there is one, it's probably something that hasn't been created yet or no one is paying attention to. But hey, I thought rap music was a fad back in the 90's! Cheers!

Or could be more human than we think! Cheers!

Yup, totally agree! Cheers!

We're not going to see $200 oil in the next 12 months. At $150, the pain is going to start to really hit consumers and industry. 10 kids on the same side of the seesaw...maybe market sellers, crypto sellers, strength of USD, commodity investors. Not that I'm for the current batch of crypto, but blockchain infrastructure companies are getting thrown out with the coins...so there may be some opportunity there. Really most of the ridiculous stuff was happening late last year when I had moved to 50% cash...crypto, markets, real estate, spacs, etc. It's Christmas again and I'm doing a ton of shopping! Cheers!

They said "Greg Malchowski is at the pool today, we're going to sink the Dow nearly 1,000 points!" Don't go to the pool tomorrow Greg! Cheers!

Current bid is $3M...Cheers! https://finance.yahoo.com/news/1-last-warren-buffett-lunch-175430933.html

https://finance.yahoo.com/news/read-conversations-helped-convince-google-034756721.html https://finance.yahoo.com/news/google-ai-lamda-blake-lemoine-212412967.html Cheers!

Yes, he's said before that he does 45 minutes to 1 hour of treadmill walking every day...usually after a couple of cheeseburgers and Cokes! Charlie only exercises his brain. Both are happy with life and what they get to do...that's probably the biggest secret! Joe Segal, a well-known investor and real estate developer here in Vancouver...he worked till the day he died at 96 last week...was one of the happiest people you'd ever meet, a philanthropist and loved his work. Jim Pattison, another well known billionaire investor in Vancouver who is buddies with Buffett, is also 93 years old and works every day. Healthy as a horse and again, the happiest guy you'll ever meet. Working and doing what you love works almost as well as nutrition and daily exercise! This in turn makes me happy, because a couple of my friends, Prem Watsa and Francis Chou, love what they are doing and it's nice to know they'll be around another 25-30 years! Cheers!