kab60

Park Aerospace

AMC up 70 pct. pre-market, SKT having a blast too

It's obvious he was/is hoping to bag another elephant. And considering his success with BNSF and BHE who can fault him. Anyway, a combination of the current FED as well as record amounts of dry powder @ PE shops makes it seem like a very difficult task. Possibly for a very long time. At the same time, Berkshire is really not getting much credit for the formidable combination of businesses, their free leverage and the ability to invest large amounts of capital internally (although not enough - BHE should really pursue offshore wind...). Perhaps be came around to the idea that Buffett bagging Berkshire could be his final elephant?

Great to see, hardly a surprise. Between this and Apple, the old man is still quiet flexible. I'd expect a rerating going forward, seems apparent he won't hold back on buybacks if he likes the risk/reward.

Bought some Teva yesterday, results out today. Really cheap on a P/FCF basis, lots of noise around litigation. Should be in a place to return money to shareholders in 3 years time. Expanding margins, growth plus litigation settlement could see this triple in 3 years but there are obviously risks here.

Bought some MO and BAM. The secular tailwind for alt managers is just massive. I also follow Tikehau Capital in France closely, it's trading below the value of their balance sheet investments I believe and it's tiny compared to BAM while being run by founders. MO is just a crazy good business, and I don't really understand the price other than it's not exactly ESG kosher. Fat and growing divy in a world of negative rates, and if inflation ever comes around you have an asset light business with pricing power. It's tempting to lever up like crazy and enjoy the spread, but there's no Buffett put unfortunately. If only they'd issue some debt at 1 pct. and buyback shares yielding 9 pct. plus, but instead of doing the obvious thing these dumb smucks rather light their capital on fire. Glad the old CEO is gone.

More BRK... It has lagged the rest the portfolio, now back at 25 pct. I think it looks like a pretty safe 8-12 pct. annual return with inherent tax advantages for a schmuck like me that pays 27-42 pct. taxes on realized gains.

More Cambria Automotive. Now 12 pct. of portfolio. Stocks only go up, but this one has mostly been going sideways.

A lot of it is flowing into alternatives like PE. Institutional investors love private investments as it gives the illusion of smoother performance. It is insane but it's the reason why these alt managers have a long and profitable runway ahead of them.

Some FPH and BSM during the week... Small bets, like the optionality

Some Park Aerospace, thanks Schwab

Sold all my Motorpoint PLC today, another quick flip. Now a tiny bit of net cash instead of being 120 pct. long. Still like it, think it's cheap, but considering the froth in parts of the market I prefer to be neutral rather than on margin.

Unless they have published something new, they expect natural gas to start to decline around 2045-2050 timeframe. In fact, worldwide natural gas use is still expected to grow 50% from 2020-2030. Yep, I went from memory and it seems like I was wrong. I think this is one of the most recent forecasts from EIA: https://www.eia.gov/outlooks/aeo/pdf/AEO2020%20Natural%20Gas.pdf They've been far off before though, but I agree pipes look interesting and bought a lot of Williams myself in March (sold most but still have a chunk in an account with low dividend taxes). There's just such a huge disconnect between public market valuations and what private infrastructure funds are willing to pay for these kinds of assets today.

I agree pipes like Williams' are cheap in a zirp world, but terminal value is a bit trickier. EIA and BP expect, I believe, natural gas demand to grow to 2035 before starting to decline. But there will obviously be major regional differences, and 15 year energy forecasts are mostly crap. Look at something like offshore wind - demand is increasing rapidly and making forecasts done 2 years ago look ridicilous. Since financing is a big part of the total cost of renewables, low rates should be a major tailwind.

https://berkshirehathaway.com/news/aug3020.pdf Japanese Companies are wayyy overcapitalized, I suppose he's making sure they understand Berkshire is as well to increase the chances of doing large deals together. Or he reached a personal Milestone and wanted to brag.

More Cambria Automobiles... US and Chinese auto dealerships having a good time, Motorpoint also back up, but Cambria isn't much up since the lows. No liquidity so takes time to get some shares.

I'm also in the camp of no surprises re buybacks, but glad he didn't let us down. There was a long period post the AGM where it traded around the lows - or between 170-180 - despite the broad rally and way less uncertainty. The old man is pretty smart. He didn't bottom tick but he probably got the best possible risk/reward.

Anyone here have any more details as to what happened? Looking at the Q1 portfolio update, it seems he would either have been levered and getting margin calls or hit by redemptions - both at the worst possible time. His massive selling in Q1 probably explains some of the crazy drawdowns many of his holdings had. Really terrible timing because some of his recent picks, like Wayfair in Q1 and Covetrus the quarter prior, have been huge winners. Trying to figure out if there's anything to learn from this - other than sticky money goood, leverage baaad.

it's still has a 8.23% yield at the current price. W/o doing anything, it's not a shabby return. Nope, I think that it's very favorable in this environment, but I see more upside elsewhere. There are still some pockets where I think the market is overly focused on the short term. I'm pretty big in auto dealerships and while Asbury in the US is up 150 pct since its low, Cambria Automobiles in the UK is only up like 30 pct after dropping back lately - despite fine results and updates from peers. So just a relative valuation call, WMB looks good here and probably have more juice. With rates at these levels their assets are extremely attractive.

WMB, like the Company and pretty cheap but not enough upside

Ulta Beauty, Cambria Automobiles

It seems the range of outcomes in March was higher than it is now. Covid19 has hardly been the deadly killer some feared though the economic impact of the close-downs are obviously hard to gauge. On that account I'd venture it's a much better risk/reward today than it was back then. And correct me if I'm wrong, but he did seem to indicate it was cheap at 160 - but also that it wasn't possibly to accumulate anything meaningfully since it just traded down for a short while. I really hope he took advantage of the price in Q2, but I'm not getting my hopes up based on his meager buyback track record. On the other hand, he's never had as much cash, and so little to deploy while at the same time Berkshire trades at a - relative to history - very low price.

CAST SA. Illiquid French SW company - extremely cheap and hopefully at an inflection point which sets it up for margin expansion.

More Lion Rock Group in HK

He seemed pretty level headed and sharp during the AGM, so I suppose he misjudged the situation - or at least the outcome - like Druckenmiller and most famous money managers as well as the majority of people on this board judging by the activity here in March. So that sucks as a shareholder. On the other hand, I think his stake in Apple shows he hasn't completely lost his marbles and turning on Airlines and banks, despite bad timing, indicates he's still flexible. Anyway, I think I'd prefer if Berkshire just put idle cash in S&P 500/BNSF/BHE/buybacks depending on the best expected returns so it became a permanent, float-levered equity on the broad market, because I think it's basically impossible for him to stockpick and beat the averages with the money he juggles with. Espescially when he won't go near stuff like Altria or Bud and cuts himself off from obvious opportunities. I Hope the old guy has an ace up his sleave and bought back a truckload in Q2, but I wouldn't count on it.