maxprogram
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Posts posted by maxprogram
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It's been many years, but from what I remember the book isn't very well written but does have lots of good info on his early years + methods. A bunch of now (mostly) useless stuff about the Tribune saga, but you can always just read the good chapters :)
Did you read it? If so, how was it? On amazon it has quite a few bad reviews. I ordered, but would like to know what you think of it.
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See the book "Money Talks, Bullshit Walks" https://www.amazon.com/Money-Talks-Bullsh-Walks-Billionaire-ebook/dp/B002YKOXHU Lots of stuff on his early years
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Glad you guys like it :) I actually only recently got my own copy framed.
If anyone here has bought the poster through Amazon, would appreciate it if you could leave a short review. There are 2 good ones up there at the moment, but a few more couldn't hurt!
(http://www.amazon.com/Years-Berkshire-Hathaway-Wall-Print/dp/0692448438)
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One option for Canadian buyers:
It seems legit but I haven't used it so I can't vouch for the service. If anyone here has tried this (or something like it) with success please let me know so I can be more comfortable recommending it to others.
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Just finished talking with someone at Amazon. Apparently, for FBA they will ship to pretty much every country BUT Canada. I don't know why, probably some strange legal agreement. Directly from the FAQ:
Can I export my products to Canada?
You can ship music, videos, and DVDs to Canada. You cannot ship books or non-media products from the U.S. to Canada.
So unfortunately it looks like Canadian buyers are out of luck. Maybe there's some sort of mail forwarding service I'm unaware of that could be used as an intermediary?
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Both the books and the posters are sold through "Fulfillment by Amazon". I just looked into it and at first glance it seems they ship to U.S. only. I am going to call customer support today to see if there is any way to ship international.
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Hey everyone, the poster and hardcover shareholders book are now available for purchase on Amazon.
For the book, there are ~100 copies at the warehouse now but many more are on the way, so if stock runs out just check back in a few days.
Also, below is a chart from a post I just published. It shows the cumulative contribution to book value of selected investments over 50 years. (More details are in the post.)
http://static1.squarespace.com/static/552198cde4b0ae29d9efc86b/t/5567a173e4b0dc7d532585dc/1432854903217/BRK-individual-investments?format=1000w
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I'll be making the poster & the remaining copies of the book available for purchase online in the next couple weeks. When it's ready I'll let everyone here know.
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Some great info (p*87 8) )
Can you elaborate on:
Berkshire’s 50-year annualized book value growth *without* gains from stock investments: 9.6% (vs 19.4% actual & 9.9% S&P) #brkstatsIs this from captive businesses? How did you account for BRK selling stocks and reusing this in internal businesses?
Thanks
This just comes from taking the investment portion out of each year's return and then annualizing the number. So not perfect of course but interesting nonetheless.
The 9.6% number assumes investments earn nothing. I also estimated the 50 year annualized return if investments were put in 10-year bonds. Final result is 13.5% annual BV growth over 50 years. Interesting to think about but unrealistic as it doesn't account for reinvestment, etc.
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Great, I'll post here when both are available online later this month.
Yesterday I posted some interesting stats I learned from the research on Twitter for anyone interested:
My favorite:
Best return from public market investment: GEICO, added 1,570% to BV until purchase in '96, 7,119% including subsequent underwriting gains.
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Hi all. This post is a bit promotional but I thought many on this board, especially those attending the meeting this week would find it of interest.
A few years ago I worked with Buffett's office to release the "Letters to Shareholders" compilation book, which a lot of people purchased and enjoyed. At the meeting this year there will be a limited-edition hardcover version updated with all 50 letters. Because only 1,000 copies will be printed (due to hardcover cost & lower demand), price will be more expensive but I still think reasonable for fans.
What I'm more excited about is the "50 Years of BRK" wall print (36x18") I created that visualizes Berkshire over 50 years. Data was obtained from many sources but primarily from a complete analysis I've done of the full BRK annual reports going back to 1965. The print will be $16 to shareholders at the meeting. I've showed to a handful of people and they all really seem to like it (see this short vid from Guy Spier after I gave Saurabh an early version: https://vimeo.com/123019888)
Here is the full blog post with more details:
http://www.explorist.io/blog/2015/4/28/berkshire-hathaway-50th-anniversary-print-book
There's a lot of other data I couldn't include on the poster b/c of size, but hopefully I'll be able to put it into some other form later on. Some might be used in a WSJ article with their coverage on the meeting later this week.
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The explanation for that is risk tolerance. If you have a brilliant mathematical mind you are almost certain to do well as a quant on Wall Street, but starting your own rocket company is not exactly going to be a sure thing. In fact if you are that mathematically capable you are more likely than the average person to know the difference in the odds between the two. Like I said Musk has a shit load of guts. He isn't just shooting for the Moon, he's shooting for Mars.
This is what I was trying to say. If was just "brilliance" however you define it, there would be a lot more Elon Musks in the world. It's a combination of a lot of things. And unfortunately that combination doesn't pop up enough in the world.
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I have an engineer friend who told me that among his engineering circle of friends, they actually don't find Musk's technical aptitude all that impressive. His main talent is rallying the best engineers together for a common cause (e.g. build a rocket, electric car).
Your friends appear to be hipsters or trying to elevate their social status by looking down on someone that everybody else thinks has high social status, or something like that.
I think you may be arguing about different things. Musk is obviously incredibly smart -- he couldn't get to where is his on luck or salesmanship alone. But there are also obviously many people (in rockets, cars, etc.) who are much more technically proficient. Even if he is in the 98-99th percentile this of course is true.
I think(?) Pretium was trying to say that it's not necessary to be the *most* "brilliant" in the tech area to get to Musk's level. That's why I think Munger's quote is perfect. Musk would be a terrible value investor but then again so are most people.
To do what Musk has done you need: brilliance + a lot of money (obtained, in this case, from previous successes & salesmanship) + incredible drive + high risk appetite.
I had a friend ask me "Why hasn't Bill Gates done some of the amazing things Elon Musk has?" The answer I don't think has anything to do with brilliance (Gates would easily hold his ground against Musk) but with the ambition & risk appetite (aka mild insanity).
Howard Hughes fit this mold perfectly: brilliant, lots of money (originally from inherited tool co), huge ambitions, mild insanity. Like Hughes I think there are future risks with Musk but damn I also hope he keeps it up! (Though I'm not sure I agree that "He's so brilliant I'm sure he is aware of the risk of spreading himself too thin" -- I think his ambitions as Munger aluded to might eventually exceed his ability.)
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Full corrected text of the letter:
http://www.futureblind.com/2014/08/1976-buffett-letter-about-geico/
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Just published a free digital book of Blue Chip Stamps annual letters, written by Charlie Munger, from 1978-1982:
https://www.gitbook.io/book/maxolson/blue-chip-stamps
You can read it as is (or send to Instapaper), in PDF, EPUB, or MOBI. I also put up Blue Chip's financials (or at least filled in all available info from old Blue Chip & BRK reports -- pre-73 Blue Chip financials aren't in the BRK reports as consolidated ownership wasn't high enough). If anyone has access to more financial info let me know and I can include.
https://docs.google.com/spreadsheets/d/1M_pui2-0EDdvo4ndIVbBJ-UrwpCQ9gpuo1dkP2WWWYo/edit?usp=sharing
The letters have good discussions from Munger on investing, See's Candies, Buffalo News, Mutual Savings, and the declining stamp business.
(P.S. for those interested the raw letters the Github repo is up at https://github.com/maxprogram/blue-chip-stamps)
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Facebook is trading users valued at $170 for users valued at $40. This is a good deal as long as it's with Facebook's highly overvalued stock. I think Zuckerberg is a smart capital allocator and knows FB's primary income stream is built on a house of cards -- if he can trade a piece of this for growing, disruptive companies it's a great deal for FB.
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I have met Tracy and talked with her many times. True, she doesn't have much experience -- but she seems to have Buffett's 3 qualities of a good manager: intelligence, integrity, and drive. Buffett likes having someone to do the "dirty work" for him. Tracy's roll seems like it's to check up on companies, especially those that need more attention. The Benjamin Moore problem came up last year and Buffett probably thought it was a good test for her -- she's not running the company, she's filling part of Buffett's role.
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It has been my experience as well. Gladwell used the "broken window theory" to explain the drop in crime rate in NY in "The Tipping Point".
It was later shown in "Freakonomics" that the drop is crime rate had more to do with Roe V Wade. I learnt not to trust what I read in Gladwell's books.
And the Freakonomics explanation was later debunked itself (http://en.wikipedia.org/wiki/The_Impact_of_Legalized_Abortion_on_Crime#Foote_and_Goetz)
I don't think it's a matter of "trusting" the research Gladwell uses (he obviously doesn't do his own research, he just summarizes others').
Gladwell's books are very well-written narrative combining summarized research studies, anecdotal stories and histories to support his overall thesis. It is not a scientific study. He "connects the dots" of what he believes to be the central theme (usually non-intuitive) of his book. In "David and Goliath", it is along the lines of "perceived disadvantages can be advantages, and vice versa." He tells stories and uses research to support that. Just because one story/anecdote is disproven or seems to lack evidence, doesn't invalidate the entire book, or make it any less enjoyable.
There will always be detractors to any non-fiction author, especially one so popular. (Taleb's and Pinker's books are examples.) If you can find a non-fiction book without major detractors, it probably isn't very good.
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Pre-1968 numbers will be average asking price from OTC tables in the last few days of the month. BRK switched to a regular fiscal year in 1967 so that's why earlier figures are from September.
EOM $/share ======= ======= 04-1965 18.25 (when Buffet became Chairman) 09-1964 13.25 09-1965 18.31 09-1966 17.25 12-1967 21 12-1968 36 12-1969 43 12-1970 41 12-1971 74 12-1972 80 12-1973 78 12-1974 40 12-1975 41 12-1976 94 12-1977 138 12-1978 158 12-1979 320 12-1980 425 12-1981 560 12-1982 775 12-1983 1310 12-1984 1275 12-1985 2470
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I see them more like an oil & gas hedge fund. They invest in properties that have proven reserves, and receive a return on that investment through extracting and selling the oil & gas at market rates. Like a hedge fund, they limit market risk by purchasing various hedges on future prices. They can earn excess returns through the following methods:
1) Opportunistic reserve purchases (low price-to-value, or "value investing")
2) Good hedging strategy (market timing + exploiting contango in futures prices)
3) Operational efficiency (keeping costs low and extracting extra reserves)
All it takes is good management, just like a good value fund needs a good investor. I think if you look at it this way most of your negative points are moot.
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Never quite worked up the guts to bodysurf the wedge. Certainly didn't have the surfing skills to do it. But Bill Gross says I'm asset-surfing it, so cool.
I did it with my brother once and his arm ended up with a near compound fracture (bone didn't quite make it through). Now I'm more comfortable sitting on the rocks and watching others do it. :)
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These are probably going to be hard to find. When I had access to someone looking through Warren's archives at BRK HQ, I asked about reports for Blue Chip and Diversified Retailing, and apparently he doesn't have them either (at least not in complete form). But according to this person Warren says there's nothing special in them anyway. Would still be interesting to see though!
Addendum: Blue Chip, along with Berkshire at the time, traded on the OTC market and not on any major exchange. So this is probably going to make it pretty difficult. In the end it may come down to finding someone who was a shareholder at the time and kept the ARs.
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Thanks Buckeye. Hope you enjoy it.
All copies sold out at the meeting (along with "Tap Dancing to Work"), so I hope some of you were able to get it at the much cheaper price.
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I have heard Charlie use the "mental model" phrase before, but I don't know if I ever grasped what he meant. Does anyone have a link to where he gives a detailed explanation? Or can someone give me examples of different mental models and how they are being used?
A mental model is simply a model you have about how something works. Everyone has and uses mental models about everything (and nobody's models are exactly the same, i.e. your mental model about value investing is different than anyone else on this boards). The key is to use a latticework of multiple models, from different disciplines, to make better decisions.
Berkshire letters archive
in Berkshire Hathaway
Posted
I just launched a digital archive of all Buffett's letters to shareholders. I think the Buffett/Berkshire fans here could get a lot of value from it:
http://berkshireletters.com
All letters from 1965-2022 are there. More importantly, you can search the letters semantically (by meaning, not just keyword). So you could search "what's a moat" and see where Buffett discusses this.
This was designed for and tested with the folks at Berkshire -- and Warren himself! -- to search the letters. Future additions could be things like annual meeting transcripts or other documents. Let me know if you have any questions about it or find any issues.
Hope everyone enjoys!
(Side note -- it's been years since I've posted here. Really glad to see CofBF still thriving!)