StevieV

Imagine... unloading BB and buying BRK at today's prices. So simple yet so unlikely. You guys make fun, but the fact remains that since 2016, BRK is up 75% to date, while BB is up 140% to date over the same period. Whether it's market exuberance, Robinhood accounts, investors recognizing that BB is not the same BB, or capital flowing to cheaper stocks from overpriced stocks...BB has done better than BRK. My point is that Prem spent 12 years as a portfolio manager then another 30 years running an insurance holding company/investment company...you really think he can't do better than BRK going forward with the universe available to him and the universe available to Berkshire? If so, why the heck are you posting on here...trolling Watsa?! Cheers! The fact also remains that since 2016 Fairfax is down more than 25% to date. I don't think it is a good time to point to stock prices as vindication of Prem and Fairfax. Prem hasn't been able to add value with shorts. He and the company have seemingly have acknowledged as much. If they can't add value with it, they should stop doing it. I'm not sure whether or not Prem/Fairfax can do better than investing in BRK. BRK isn't a bad stock at all in my estimation. BB was a big loser a month ago. The sun has now shined upon shareholders of the company and turned it around. I hope Fairfax is able to take advantage. I wouldn't, however, want to point to the BB position as evidence of the company's stock investing acumen.

The question becomes....how will shareholders feel about Prem if he does not capitalize on this parabolic move up in Blackberry? What will you do if the Blackberry price retreats and we find out that Fairfax did not lock in any of the gains? As SJ correctly points out....a $1 billion unrealized gain on the convertible debs alone? Only of value to us if Prem acts to lock in those gains. Would you be okay if he does not act? If he lets this opportunity pass us by? I don't expect them to monetise. Sharp moves like this don't usually offer big shareholders the chance to liquidate. Normally you may not, but this is not a normal situation. The volume today is again HUGE. 123 million shares have traded so far today as I type. Just over an hour into trading. I see no reason Prem couldn't dump 10 million shares for $200 million today. By this afternoon, maybe 10 million shares/$200 million will look low. JOKE I can't help but make - watch Fairfax make a killing on BB and then lose it being short GME

No, FFH has no legal impediment to selling its shares. There is, however, a sigalling risk when insiders are dumping their shares. If you can dump them in one large block-trade at an agreed price and then fill out the regulatory filings to make the public announcement afterward, then it's not a problem for you. If you cannot find a buyer for a large block, then you'd need to sell them on the market in small dribs and drabs over the course of a few months (it is a very large stake!). Before you are even able to dump the majority of your position, you'll have had to file some insider transactions reports, which signals to the market that insiders believe that the price is too high. In short, your favourable price could disappear because of your obligation to file. On the other hand, if you were not a BB director, you could quietly dump your shares on the market over several trading sessions and your only need would be to eventually file a 13F a few months later... SJ If the WSB board is what is driving the share price (and that seems to be the case), I'm not sure the signaling risk is as great as it would normally be. How many folks over there are buying because of Prem's involvement? How many are going to sell because Prem is selling? I know very little about the WSB subthread board, but my guess is zero. If the stock starts to lose momentum because of Fairfax selling, maybe then. Volume today and some recent days has been huge. I think Fairfax could dump some shares if they like.

If my quick math is correct, Fairfax's BB position is up roughly $400 million YTD (equity and convertible). We'll see where things go.

Is this supposed to be supportive of the bull case? Doesn't look that way to me. 12% ROE gives you a $70 per share net profit...that's today...gives you a 10 times multiple of around $700 per share or 1.2 times book. If they compound at 12-15% ROE for the next 15 years...what would you say is fair value for that business on a per share basis? From a price of $430 CDN today. Cheers! The chart I quoted showed that the EPS in the 5-year range from 2005-2009 was greater than the EPS a decade later during the 5-year stretch from 2015-2019. An earnings/share decline over 10 years isn't bullish in my book. You give the bull case - that they'll today generate good profits. I haven't verified your numbers or Thrifty's, but your estimate is double the recent past EPS given by Thrifty. Sure, if they now start producing double the EPS, the shares should be worth a lot more. Of course. Fairfax hasn't had a problem projecting gains (15% in fact). It has had a problem avoiding stumbles so that they actually achieve them.

Is this supposed to be supportive of the bull case? Doesn't look that way to me.

Stock market capitalization is closing in on 185% of GDP...long-term interest rates are near zero...you have bubbles in other assets classes...tech stocks are frothing at the mouth with Tesla leading the way at a 1,000+ P/E...government debt as a percent of GDP is hovering over 100%+ for most developed countries...consumers while paying down debt in 2020, still live hand to mouth for the most part...what happens when stimulus stops...I'd say the short position this time may have some legs going forward compared to after the tech wreck when they didn't invest heavily and held short positions. Cheers! After posting my last comment and thought about it a little more I also wondered if shorting Tesla right now actually makes some sense (not that we know that is the name FFH was short at end of Q3). So, yes, I agree with you :-) I’m not a fan of shorting...but if I had to pick one, even though I really like the company and Musk...that would be the one. Extremely overvalued...one miss and boom! Cheers! I am thrilled if FFH is short Tesla (seems very likely at this point). It would easily explain the heavy short losses and would rule out something much worse, i.e. Amazon, etc, IMO. I've been searching for a cost-effective way to insulate myself from the inevitable collapse of certain ridiculous tech prices, with Tesla at or near the top of the list. As it turns out, this may already be partly built-into my FFH investment. We are speculating, but I hope this is correct. TSLA is up 40% since the end of Q3. That strikes me as less than thrilling. Sure, TSLA looks overvalued. Looked overvalued at half the price. At a quarter of the price. If the short is TSLA and FFH has held, they need a big move down just to counter the move of the last 2 months.

I would largely agree with this. I would consider that as the most uncertain to least uncertain returns. I am the least certain about Fairfax given their recent investing history. Most certain about BRK.

Viking, Any thoughts on how and to what extent the virus will impact KW's business? More multi-family in their portfolio than anything, but still have commercial and retail exposure. Multi-family should be less impacted, but some changes from people shifting where they live. Possibly some opportunities as well. SteveV

i don't think a bumpy 3-4% / year ($15-$20B) is a crazy guess. If they don't do a big acquisition/net stock purchases, they need to buy like 25 yards/yr or so just to stay cash neutral. I agree that Berkshire is price sensitive, maybe some years its 1% or some years its 5%. But to see them actually executing at about max volume is a positive foil to the strawman that Berkshire will forever accumulate excess captital. We're moving in the right direction 2018: $1.3B 2019: $4.8B 2020: $9.5B+ If 3-4% then that's about the same as S&P 500's net buyback + divvy yield, not that that matters. The feedback loop will be interesting. I think the Q2 opportunity was there because they weren't aggressive in Q1. Now that they've been aggressive in Q2, poof, the opportunity is gone (or, say, diminished).

Basically a speculative investment. $6 conversion in Nov. 2023 may turn out great. Not that much above the current $4.80 and 3 years is a reasonable time. Of course, may not work out at all.

I answered good host and good guest. If I had to choose only one, I prefer a good host to a good guest. A good host can get something out of most guests. A badly hosted podcast stinks no matter who the have on. I also listen to podcasts without guests.

I also don't like - "you get the rest for free" analysis. How big is the "Free" part? How sure are you of the valuation of the "fairly valued" part? If you change the multiple of the "not free" part maybe you aren't getting anything for free or the "free" part only represents a small discount. I'm concerned about the value of this $100 B, the ability to deploy it at high rates and the timing of doing so.

I thought that selling out of the airlines showed a lot of discipline that is difficult for most people, myself included. I don't exactly why Buffett bought the airlines, but presumably he though the industry had rationalized so that there were a reasonable number of competitors acting rationally. Air travel seemed like it was on a sustained upward growth and additional capacity was at least somewhat limited. All of those things are no longer true. Seems simple enough - all the reasons he wanted to own the airlines are no longer applicable, so he no longer wants to own them. Straightforward, but not easy.

Testing is coming along. Abbott has a test that can give a result in as little as 5 minutes. I also ran across this article about an at-home test. We could also really use antibody tests. One of the treatments being investigated proving that it helps somewhat would also be a huge plus. I think there is a path to decent scenarios. In the short term, I'm not sure. I'm somewhat optimistic/hopeful that we'll be in reasonable shape to contain it in the fall.

According to this tweet, the CDD is going to start recommending masks. No brainer. Problem is getting the masks out. I've read about the "stigma" of wearing a mask. Sure, 3 months ago if I had worn a mask to work, it would have stood out and people would have wondered what was wrong. If I wore one next month, seems like it would be fine.

Aren't we trading where the economy is in 6-12 months instead of where it is now? Not saying we won't go down further or anything (who knows), but obviously the market is forward looking. Yes, I understand that. The market also doesn’t really care about death and so forth, it’s a cold calculating machine. But my thinking is that the economy in a year will looks substantially worse than it is right now. I am just not buying into the V recovery. In any case, even if you buy the V recovery, it seems already priced in. The longer L shaped or U shaped recovery like we had in the GFC is by no means priced in. This is worse than the GFC in my opinion. Possibly way worse. I don't know if it will be V, L or U. I do think you are right that things won't simply snap back. People won't get new jobs as fast as they lost their old ones.

2019 S&P 500 earnings of $163. So, we are at 16x 2019 earnings. In 2020, things are much, much worse. I continue to think there is huge uncertainty, but that 2019 earnings won't happen for 2020. Does it return in 2021, 2022? What about the growth rate? I agree that the market is trading higher than I'd expect given the uncertainty, so I would guess will see it trade lower, at least periodically. I assume it isn't lower than it is trading now because nobody knows the limits of what the Fed and the US government will do to support the markets; and people (myself included) now expect rates to be super-low for a long, long time.

I've been thinking about masks. I'd be ramping up mask production as fast as possible. But, I've never worn one in my life as far as I can recall, and I'd need one or two a day. Same for the rest of my family. A billion or more a week in the US. I figure it would take many multiples of current mask production. How possible is that? Regardless, I'd push hard on masks. Absent a treatment, this will at the least be around in the fall.

Just remember that the March 2009 bottom was very brief. The "buyable" bottom was -45%. If you were a couple weeks early or a couple weeks late, you'd be buying at 40-45% discount. Everybody counts the rally from March 9, but almost nobody bought then. I was buying in April 2009 at much higher prices. This seems most like 1929, but remember the FDIC, employment insurance, monetary policy, stimulus make this scenario unlikely. Two good points. Impossible to time buying at the bottom anyway. The other thing I sometimes think about is the discussion about being able to stomach 30% or 50% losses or whatever if investing in stocks. I think that actually understates the case. Nobody knows what the bottoms will be. If the market gets to the down 50% level, people won't be only concerned that they are down 50%. They will be concerned about being down more from there. Gov't action is at least one reason that this different than 1929. Not necessarily better in all ways, but at least different.

"Even if the research goes well, a vaccine wouldn’t be available for widespread use for 12 to 18 months, said Dr. Anthony Fauci of the U.S. National Institutes of Health." Well, that's why I said - "Testing doesn't mean close to roll-out or even effective, but better than nothing." 12-months would be way better than 18-months which would be way better than never. Earlier testing starts and the more number of trials, the better chances of closer to 12 rather than later.

Testing on coronavirus vaccines has begun in the US - https://abcnews.go.com/Business/wireStory/coronavirus-vaccine-test-opens-us-volunteer-1st-shot-69624041 Unprecedented speed. Hopefully we'll get some good results for this or another vaccine. Testing doesn't mean close to roll-out or even effective, but better than nothing.

I don't see how a recession is avoided. Can't shut down so much and have the social distancing without causing a recession. I think most else is up in the air. Among other things, depends what happens with the virus, which I think is pretty speculative. Could it recede over the summer and come back strong in the fall? Maybe. Never recede that much? Yo-yo with corresponding yo-yo policy responses? When will a vaccine arrive? Any treatments before that? Why are you very confident we will not see a repeat of 2008? I am hopeful that this is viewed, and turns out to be, somewhat temporary and businesses act according. That government makes reasonable policy decisions, and that we get a short recession with a bounce-back. No confidence of that though, just think it is possible and am hopeful. Wouldn't be surprised by a longer or deeper recession either though, for all the reasons you mention. Many businesses and people aren't prepared for such a quick and large slowdown (some aren't prepared for any at all).

So now estimating 1-1.5 years for a vaccine (the administration and more sophisticated people were saying weeks to months recently). Strange. I thought all the fat margins we'd been handing to pharma for decades would have resulted in tremendous amount of R&D infrastructure to handle something like this more rapidly. Instead, they've spent it on inversion mergers and patent defense litigation. How long is a life saving vaccine supposed to take? How long did it take to develop a polio vaccine? How much of the 12-18 months is safety testing rather than development? If a company is able to develop a life saving vaccine against this in 12-18 months, that would seem to be a miracle of modern medicine, not a failure.

I meant from the weekend pricing of about $230 over moderate to longer timeframes. Of course, just an estimate and endpoints certainly matter. From today's pricing, I am not counting on a big multiple expansion. I do think that I should be able to exit at least at about the same multiple as today and that multiple expansion may provide a bit of a tailwind. The multiple may certainly be lower at various times, but my guess is that they'll be relatively brief periods.