aws

I used to do a bit of a credit cards reward hustle by buying gold bullion on ebay to resell to dealers. Buying online lets the gold be delivered securely to my door with the vendor on the hook for risk in shipping. The markups were so small on ebay that I ended up with a net cost of a couple percent under spot. I imagine this is still the way to go. But if it has to be done in a cash purchase from another country (for reasons I'm sure I don't want to know), then you should probably just check in with the coin dealers in the area you'll be going to and try to arrange the purchase in advance.

On 6/30 it was 601,167 A + 1,300,940,370 B = 1,468,461 A Share Equivalent On 7/26 599,924 A + 1,301,126,370 B = 1,467,342 A Share Equivalent Net reduction was 1,119 A Shares

July purchases were 1,119 A share equivalent, so around $470 million worth.

Modest would be a very accurate description of his Berkshire holdings. He owns 5 A shares in his living trust and a couple thousand B shares in his kid's names. https://www.sec.gov/Archives/edgar/data/0001646348/000108131618000011/xslF345X02/wf-form3_151640024127980.xml

Are we at all concerned that maybe something has changed and Greg Abel is no longer the successor? It is a rather surprising transaction that leaves Abel with no skin in the game.

Very sketchy structure with a very unclear float. It looks to be up to 97% owned by AMTD Idea Group, which was also the underwriter in the HKD IPO. Oh, and the CEO of that company is facing an industry ban for misconduct: https://www.caixinglobal.com/2022-06-02/hong-kong-money-man-calvin-choi-faces-two-year-industry-ban-for-misconduct-101894261.html

There has been an outstanding offer to pay large sums of cash and citizenship for defections with military equipment, although I don't know how serious the offer was intended to be or if it yielded anything. There was a story going around on Twitter today about negotiations for pilots defecting, but it turned into more of a spy drama with the FSB trying to pump Ukraine for info about anti-aircraft guns and the Ukrainians tricking them into traveling to Minsk to wait around for meetings that would never happen.

The Russian missile that killed over 50 fleeing civilians at a train station was painted with "for the children" https://www.newsweek.com/russian-missile-kramatorsk-civilian-train-station-children-painted-1696354

In some cases I understand how companies can drift into being run not for the benefit of shareholders. Especially situations where the board members do not hold material stakes and have no direct incentive to maximize shareholder value. For the Buffett historians, something like the Sanborn Map Company, where they had substantially more assets than the market capitalization, but were doing nothing with them. Companies that are worth more dead than alive and need an activist investor to shake things up and unlock value. But it feels like there's a big difference between an individual company or fund finding itself in this situation, and a cohort of people that purposefully create value destructive situations for their fellow shareholders. They don't seem to buy in at any great discount, they get in at fair value overall, but then siphon the other shareholders' money to themselves to make the profit. CCUR was taken control of at around $5 when they had $6/sh in cash, probably roughly representing what a reasonable liquidation would yield. Their profit came from paying themselves management fees, delaying and frustrating shareholders, and then buying them out at half fair value. Maybe you could forgive a single such transaction, but this is clearly their game plan. Why would one family need to own a dozen 40% stakes in a variety of public shell companies, vs. simply cashing them all out and using the proceeds to further their goals? At what point does it crossover from slimy to criminal?

I'm sure you could go down many tangents if you try to figure the reasons the government is trying to incentivize particular behaviors, and in the end you would know nothing more about whether i bonds are a good buy right now or not. At the present, I bonds offer favorable terms over other short-term investments, both in terms of yield and tax incentives. Is that because the government is trying to incentivize people of moderate means (those with 10k+ of annual savings) to save more, or an accident of the rules they established that make certain times better to invest than others? Maybe a little of both, but I don't care. We get mortgage interest deductions because they want us to buy a house, child tax credits because they want us to start a family, retirement tax credits for low income people to save for retirement, so it's not unreasonable to expect they also want people to have a better vehicle for liquid savings than banks, even if it costs them a bit more than selling a few more T-Bills to fund what's covered by those who invest in I Bonds. Knowing whether it's an incentive or an accident doesn't change anything about what you should do with your money though.

I’ll start by laying out some of the facts I have found about a family group that seems to have a business model where they systematically take large stakes (around 30-40% usually) in small, cash-rich companies, takeover the board, and then seem to get away with running the company for their own benefit instead of the shareholders. And then after sharing the outrage I guess I was wondering if there’s anything that can be done to stop them, as they seem to just loot a couple of companies a year with impunity. By the time they initiate their scheme they already have a near controlling stake and the entire board, so it’s unlikely another big shareholder could engage them in a proxy fight, and to the extent that individual shareholders are damaged none probably have deep enough pockets to hire lawyers to fight the pilfering. So I came across a stock that looked very appealing, until I dug into the shady family that controls it. EVOL sold its operating business late last year and ended up with a little over $3 per share in cash. After the sale they were basically just a shell, and the share price traded up near the cash value. The assumption would be that they would wind up the company after the sale of the operating assets and distribute the cash. The stock had languished around $1 per share for a couple years before the sale announcement, so a $3 per share payout would have been quite welcome. The problem is the company was 40% owned by the Singer family, and they completely control the board with a slate of directors who have been involved with several similar takeovers in the past. They decided to keep the corporation open and pivot to be an investment holding company, paying themselves considerable salaries and directors fees to oversee the shell of the business, and giving the entire proceeds of the sale over to invest (with a 2% management fee and 20% performance fee) to the son of the 40% shareholder. It seems like the exact same playbook they did a few years prior with another company CCUR. They took control with about $6 a share in cash, entered into a similar terrible management agreement and tread water for a couple of years on the asset side. Along the way the minority shareholders got frustrated at never seeing any cash, and the stock price dropped to around $3, and the Singer family took the company private at that price. They justified paying $2.86 per share on the take private because that had been the average share price in the recent past, even though there was more cash than that per share on the balance sheet. There might still be some minority shareholders now that it’s private, but you can bet the controlling shareholders are still using it as their personal piggy bank and the minority shareholders will never see fair value. Within a few months EVOL had given back all of the market value gains from the sale (even though they still had the cash) and traded back below $1. A dutch tender last month at half NAV brought the share price up a bit, but it’s still an unfairly low price that shareholders are taking to avoid getting the entire sum stolen. And a recent 13D filing by a Singer has suggested that the company should be taken private (like they did with CCUR). If that happens you can be sure it will be taken private at an insultingly low price. That’s two examples in the past two years, but there’s likely been dozens of similar plays by the same group. Future targets are likely CBIO, which is fighting a board takeover by Singer, and SEAC who haven’t yet sold their operating business but have the board infested by Singer collaborators. The ringleader of the operation appears to be Gary Singer, a convicted felon who is barred for life from serving on the board of a public company, but since he uses his wife, brother, and son to be the nominal owners he can pretend to not be involved, even though he sits in on all the conference calls and is copied on emails sent by the nominal owners (see this recent letter sent by CBIO for those lurid details: https://www.globenewswire.com/news-release/2022/07/19/2481760/0/en/Catalyst-Biosciences-Sends-Letter-to-Stockholders.html). Clearly the board is breaking their fiduciary duties to shareholders when you look at the big picture with the context of all the other deals the family have been involved with, but it’s probably hard to demonstrate that any individual action is such. So what can someone do to combat this family who seems to loot companies with impunity? Their bread and butter seems to be companies in the $50 million range, of which they own about half anyway, so they probably cause losses in the $10-20 million range to outside shareholders. Likely not enough to interest the class action securities lawyers, and too small of an overall pot for a larger shareholder to solely bear the expense of fighting for. I suppose it should really be up to regulators to control, but if they look at anything they probably look at each deal in isolation and decide there’s nothing egregious enough for them to get involved with. Have the Singers figured out how to repeatedly commit the perfect crime, or is there anything that can be done to fight back?

Whether they cap wells, flare, or fill up storage, it still amounts to zero revenue instead of the $100mm+ per day they were receiving before. They have no way of selling this gas to Asia like they can with oil. It's a serious hit to their revenue, and it forces Europe to do what they should have done anyway and get off their dependence on Russian energy. I think it's a bluff by Putin, but unfortunately Germany is folding anyway. In the face of this pinching of energy supplies they decided to self-inflict some more pain by closing perfectly good nuclear power plants by the end of the year, and have convinced Canada to return the natural gas turbine to Gazprom.

States need to maintain balanced budgets, unlike the federal government, so when they do these it's more like returning money to residents and not printing money.

Not selling See's in 1982 for $125 million when offered it turned out to be a $100 billion mistake. You see, Berkshire shares were trading at $500 in 1982, so he could have taken that 125 million and repurchased 250,000 shares, which today would be worth 105.5 billion dollars. That wasn't even his only 12 figure mistake. Buying Berkshire itself instead of operating out of the partnership was an even costlier mistake, which he pegged as a $200 billion. The two worst investment decisions in history! I kid of course, but I do wonder based on how well he compounded with everything else he did in those years if he actually was better off keeping it. It's probably a somewhat difficult calculation with figuring out the compounded returns on the capital over the years vs. getting a lump sum right at the start. Although I'm certainly not losing any sleep over it regardless.

Not sure how much value there is in dissecting a 13 year old post, but if it's referring to stock put options like the BNSF trade then it's not accurate. You don't get to write off any losses on short puts for tax purposes until you close the position, which Berkshire obviously didn't do. They did have all those index put options around that time as well. He shorted puts with like 15 year durations on a variety of indices on terms where they received all the collateral up front, would never be required to post any collateral of their own for mark-to-market losses over time, and they were European style so they could not be exerised early. Essentially it was a bet that Black-Scholes option pricing wasn't really accurate over very long time frames, which I would intuitively agree with. When the buyer literally has no chance of a profit unless the index is lower 15 years later after issuance it feels hard to lose. I wish I could short Berkshire puts on those terms.

Couldn't possibly disagree more with that cynical take. Ukraine is fighting for their lives and sovereignty against an invader that doesn't acknowledge their right to exist. They aren't fighting to help the democrats win the midterms. Putin has shown his cards, that he thinks he's Peter the Great and will reclaim the former empire. Russia's pretext for the invasion was a lie, and any concessions given to them to stop the fighting just strengthen Russia's position in the future when they will make up some new excuse to expand further.

Russia at least maintains some plausible deniability when they say something like "We have no problem with grain exports, but the Ukrainians will need to demine their harbors in order to allow commercial ships to enter". Then they can say that it is Ukraine causing the lack of grain exports. Ukraine obviously cannot trust any Russian statements that they will not exploit any removal of defenses, so there is a standstill until an external security guarantee is made. If Russia's bluff is called and such a guarantee is made, and then Russia turns around and starts destroying grain deliberately, it gets a lot harder to maintain their narrative and their goal of winning allies in the third world. But with an unwillingness to impose a no-fly zone, it seems unlikely there will be a naval version in time for it to really matter. If they're already harvesting grain and it has nowhere to go, then it's probably too late for any type of good solution to the problem, and Russia will win battles in their wars for world hunger and PR.

Lambos surely

It's hard to take anyone talking about Russian military might seriously. All you have to do is look at a map and you see they control much mess Ukrainian territory than they did three months ago. What they have managed to do is bumble their way into a strategy that temporarily plays into their strengths. They have more artillery and can outrange the Ukrainians, so by staying at maximum firing range they can completely level the towns they are trying to eventually occupy, and by grinding attrition they make small gains. And then they play it off like this was all part of the master plan, where going for a direct assault on Kyiv was all a feint, even though it cost them thousands of troops and hundreds of tanks. While they are taking some towns in the Donbass, but it's not even clear whether they are making net progress, or if they are losing more in the south than they are taking in the east. And with more advanced weaponry evening the playing field, it's tough to imagine this dynamic continuing for much longer. And even if it does, how much does it play to their advantage to completely destroy the hometowns of the most Russian leaning areas of Ukraine? Not only does it make later administration much more difficult, but they are surely turning many people that were sitting on the fence into lifelong haters of the Russians. I've seen more reports lately of partisans attacks in the occupied areas, which is yet another thing for the Russians and their collaborators to worry about. You have 40 million Ukrainians fighting against 200,000 invaders. Obviously they aren't all soldiers, but subdivide it anyway you want and it's still a huge discrepancy. 20 million men, 10 million fighting age, some smaller number with military training and equipment, but anyway you look at it this invasion force seems incapable of winning the long fight as the numbers will get more and more skewed. Ukrainians will be able to reinforce and grow their fighting force over time while Russia's will be depleted.

Some GEOS. Hit a new 52 week low despite booking some solid rental and sales contracts during the quarter. This stock seems to randomly drift up and down 40%+ a few times a year, so just hoping to be there for the next one up.

I would lean toward him not wanting to buyout Oxy if for no other reason then it burns the option value of the warrants. The warrants don't expire until Oxy redeems all the preferreds, and that can't happen until 2029 at the earliest. What's a 7 year ATM call option on 84 million shares of OXY worth? In a quick glance at their financials they don't seem to break it out, but it must be at least 2 billion option value. Now, it does make it easier to acquire the whole company when you effectively already own an extra 8% of the diluted shares outstanding, but unless he thinks there is a control premium that he could achieve worth substantially more than the option value he gives up, then I think he's happy enough just owning a minority stake.

A shares are obviously tougher to buy and sell at low cost (especially taxes), so it's not something you want to do lightly. If you have tax free accounts in sufficient size and are sure you are going to hold Berkshire for years, then I would definitely hold A shares over B when the premiums are like they are presently (roughly $500/sh, or .33/B share). That's a negligible downside for something that could in theory have a much higher premium in the future. Share class price differentials aren't something I really track, but occasionally wild things can happen. I remember last year the super voting Discovery shares traded at something like 5x the non-voting shares. Berkshire is too big for anything that wild to happen, but at 12 basis points or so you really don't need much. Even Google has more like 50 bps between their two share classes.

It's been a good week for charity auctions. First Buffett's lunch sells for $19 million, and now a charity auction to benefit Ukranian refugee children reached over $100 million. The auction was for Dmitry Muratov's Nobel Peace Prize, with 100% of the proceeds benefitting UNICEF. They did a live stream of the auction, which if you watch starting from around the 50:00 mark is behaving like a normal auction with 100k and 200k incrementing bids, until one bidder goes straight to 103.5 million.

By my calculations Berkshire has slightly underperformed the S&P 500 since the bottom tick of the covid bear market. Berkshire is up about 68% off that low as of now, while the S&P 500 TR index is up 74% off the low. And that was after a pretty severe underperformance in 2019 where the S&P beat Berkshire by 20%. Since I am a buyer I do hope the underperformance continues for another couple of months, but I am not being too greedy and I am adding quite a bit around here.

Check this thread and I'll think you see just about everyone is.