Parsad

All inflation is supply/demand related...whether it is due to lack of infrastructure, scarcity or transport coordination. So, yes they should have been moving rates up a while ago, as it wasn't short-term transitory, but more of a longer-term nature. Things should improve by early/mid next year, but they have to curb demand to meet supply right now. There isn't a whole lot that congress can do that will alleviate that over 12 months...oil production takes 6-8 months to start up, let alone get production going significantly...refineries take nearly as long...you can't run ports more than 24 hours a day...and with a hot economy, demand for oil isn't going to decrease. So it all trickles up (rather than trickle down economics) and every one in the chain passes costs on to the final point...the consumer! So, rates should have been going up since the middle of last year, but probably in 25 basis point increments...not the herky-jerky reactive behavior of the Fed. Cheers!

Are you crazy?! Try the See's truffles...if they are too rich, then buy the chocolate covered nuts. But don't throw them away! Cheers!

I had moved to a ton of cash every time...late 1999...early 2008...late 2021. Didn't expect the pandemic and got hit on that one...although I was still 15-20% cash at that time, and borrowed for the first time in my life to buy equities! Cheers!

$5B in equities plus investments in BB, ATCO, etc...compared to $45B in cash and short-term bonds. They have significant potential for future investment gains, increased dividend income, alongside steady insurance income. While investors have plenty of choices, they don't get 3.5-1 leverage like they would through Fairfax. Fairfax only needs a 5% return on their investment portfolio annually to get a 15-17% ROE, while the average investor has to get 15-17% return on their investment ideas annually. Cheers!

There is an article in "Tradewinds" from the end of March that discusses how analysts are having a difficult time understanding Atlas...so you don't have to take my word for it. https://www.tradewindsnews.com/tag/atlas_corp Not only is Atlas a lessor, it is a finance company as well...one that owns the underlying assets being financed by leasing cash flows. Such companies, when well managed, have easily been valued at 10-12 times earnings. GE Finance in it's heyday was valued at 20-25 times earnings, and it wasn't particularly well managed, nor did it own the underlying assets except as collateral. McDonalds is considered a restaurant business, but it's as much a real estate business. Most people never understood that about McDonalds. Cash flows paid for real estate...long-term cash flows. Atlas is doing the same. Extending leasing contracts to an average duration of 11.5 years presently, and then paying for hard assets using those cash flows. If that isn't inflation-linked, then I don't know what is! Markets are bipolar. They will vote based on quarterly results...value investors have the luxury of, one, not being bipolar, and two, investing in businesses at the right price for the long-term. Atlas will probably add a couple of businesses over time, but whether they do or not, will not take away from the quality business they have built so far in roughly four years since Sokol joined and FFH invested. Four years! I'm more than excited to see what they can do in another decade! Cheers!

Fairfax has almost 90% of its portfolio in cash or bonds maturing in less than 3 years. Berkshire has over 50% of its assets in equities. If the market turns up from here, then Berkshire will do better. If the market has further to fall, which is likely based on further expected rate increases, then Fairfax will be far better positioned. So it's a coin toss, but the odds are in FFH's favor right now. Most insurers are going to get the crap kicked out of them from bond losses due to rate increases. Fairfax is best positioned to deal with that, as well as put money to work as rates rise and markets fall. We also already know that Fairfax does well when other insurers are getting beaten from catastrophe losses, as premium pricing only gets better after such events, and Fairfax reserves better than 90% of insurers. Cheers!

Name one company better positioned than Fairfax for this environment? Maybe Google...a ton of cash, little debt and steady, recurring cash flow? That's about it. Not even Berkshire is positioned as well for a stagflationary environment and market downturn. Cheers!

Markel is almost certainly a two-Ted's position and not a Buffett position. Alleghany was all Buffett. Cheers!

Godiva chocolate can sit for months in third-party retail stores. They usually go on a half price sale after every Christmas...chocolate that has been sitting there since October! Don't even get me started on Lindt! So quality control isn't the same as See's. Now Godiva stores are different...the chocolate doesn't sit, just like See's stores. Although, some of the boxed chocolates at Godiva's stores comes prepackaged. Most of the chocolate at See's (not lollipops, toffee, etc) that you see in prepackaged boxes are prepared at the stores as chocolate arrives. Just because a burger may taste fine sitting for three hours under a heat lamp, doesn't mean it's fresh! So when you buy See's at store locations, it's made recently. Cheers!

I spoke to Chuck Huggins about this many years ago...he was a very nice man! Wondered why they didn't do that, as well as expand to Canada on the West Coast. He said it was about quality and freshness control. Apparently, the window of making chocolate to delivery at locations is 3 days maximum. Huggins didn't want the distribution taking any longer than that. Also said that competition was quite tough in Canada with some very well known local brands...Purdy's, Laura Secord, Roger's Chocolates, etc. That's also the reason why they've grown organically for the most part out of regions where they were already known...other than a handful of licensed stores and kiosks outside of their core region. The manufacturing sites are within three days delivery to the locations in their region. This maintains quality control and margins are better on the retail side. Cheers!

ATCO is not a shipping company. It's a leasing company. Investors and analysts don't fully realize that yet. 6 times earnings is low. 10-12 times earnings is more reasonable. In 2024 it should be at $20-22 a share. It fell closer to half of intrinsic value, so I bought. Cheers!

Haven't bought any Recipe or Fairfax India. I don't like Recipe and I'd rather have exposure to Fairfax India through my Fairfax holdings, where it benefits from its ownership in FI and performance bonuses from FI. Cheers!

I bought a bunch of ATCO today. First time in a few years! Cheers!

Cruise ships go to Hawaii. Not sure where Dinar is located or how convenient, but ships do definitely go to Hawaii. Cheers!

I agree! No one saw inflation coming a year ago. But you had a huge bottleneck in the supply chain, increased pressure on oil and commodities, even more pressure due to the Ukraine war and a shortage of labor. Combine that with the amount of cash on the sidelines, and you have a perfect storm of inflationary pressure. The supply chain while still somewhat stagnant is loosening. Increases in interest rates will have some influence on inflation. The Ukraine war at some point will fizzle in terms of global worry. I suspect we'll see a short recessionary environment as markets adjust and then continued steady growth. Employment is at historic lows...money is flowing...technology is continuing to advance humanity...consumers while adjusting spending, will be earning more. This is neither 1970, nor 1929...but there may be shades of such periods where we saw some dramatic corrections like 2000-2002 in tech stocks. In the meantime, I've gone from 50% cash down to 25-30% cash depending on accounts, and will probably put most of the rest to work as stocks get even cheaper. Cheers!

It's hard to go by Schiller or anything else, when government intervention distorts normal cycles. Other than 2008/2009, when P/E's fell to slightly below median levels, Schiller has been wrong on the bull market for 12 years. Only when government's stop interventionist policies will markets go to reasonable valuations. But administrations would be too afraid to just stand by and let things correct themselves. In the mean time, I agree with the idea that you buy things cheap and sell at fair value. Cheers!

Sorry All, The site had some file issues from early Sunday morning, and I didn't notice till this morning as I was busy spending the day with my nephew on Sunday. It's fixed now. Apologize for the inconvenience! Cheers! Sanjeev

Am I the only one that thinks Munger, who always looked older for his age, has recently aged better than Buffett? At 98, Munger mentally seems extremely sharp, whereas Buffett seems to have slowed down a bit at 91. Warren still looks good for 91, but he seems to be laboring a bit during the meeting now. We're so lucky to have received their wisdom for so long, hopefully they have much more time left. Cheers!

But now is a good time to have a high cash allocation? No, that would have been at the beginning of the year. Now would be the wise time to start putting some of that money to work, and put further money to work if volatility and market drops continue. You can hold cash forever, make a purchase, and have the market cut right through it shortly there after. Bottom line, and I don’t think it’s really disputable, is that holding any amount of cash for an extended period of time leads to underperformance. Even if you cherry pick the hell out of the historical data, there are very few actual prolonged periods where you’d have been better off hold it vs just rolling up the sleeves and buying something of quality at an average or better price. Yes, the main words are "extended period" and "prolonged". No one is disputing that. But selling assets as they reach intrinsic value and then waiting for fat pitches where they are below intrinsic value is not the same thing. Cheers!

First, they've avoided most of the downside their competition got hit by...so by the time interest rates finish rising, I think they would have prevented close to $1.5-2B in losses. Second, with markets and bonds both getting pummeled YTD, they have opportunity in front of them. So I imagine they will make at least $2-3B in bond gains/income and equity gains/dividends directly related to changes in the cash portfolio as they invest it. Depending on how bad things get, they may find some good acquisitions, both insurance and non-insurance, which they would not be able to take advantage of without cash in the hold co and cash in the portfolio. Net, they will have made/prevented a swing of close to $4-6B looking 2-3 years out just by moving to cash and then putting that cash to work. Cheers!

Same. I finally initiated my first positions ever in GOOGL, AMZN and DIS today. Hope they continue to fall...I was jacked up on cash and still have about 35% of my portfolio in cash after starting those positions...since we all know that cash is what stupid people hold! Cheers!

So the -13.5% or so start this year for the S&P500 is the worst since 1939, and would the 3rd worst start of the top ten in recorded history...only falling short to 1939 at -17.3% and 1932 at -28.2%! https://www.marketwatch.com/story/a-rough-4-months-for-stocks-s-p-500-at-risk-of-booking-the-worst-start-to-a-year-since-1942-heres-what-pros-say-you-should-do-now-11651250525?siteid=yhoof2 Interestingly enough, in 8 of 9 years, excluding 2022 YTD, the S&P500 did not get any worse by year-end or recovered from modestly to dramatically. Only 1973, it got modestly worse by year-end. https://www.slickcharts.com/sp500/returns Doesn't mean there won't be further volatility this year...the market could drop another 20-30% from here...who knows?! But the likelihood of the market ending much worse than now by year-end is historically only around 10%. Cheers!

I've seen stranger things happen. Leverage can be dangerous...it killed Lehman Bros., it killed New Century. Even the smartest man in the world is capable of doing something incredibly stupid. What if we see a 1929 again...margin call doesn't seem so unlikely then! Cheers!

Probably why he's pissed at Bill Gates for shorting Tesla. Cheers!

I do get those! As well as the hearing aid ads. By the way, I think you meant erectile dysfunction...not distinction. I'm sure there are a few people for whom it may be distinctive, but mine would be the dysfunctional type! Cheers!