zarley

This is the reason why there is so much confusion. A small group of people have decided to replace the generally accepted definition of a term 'inflation - a general rise in prices in an economy' with their own meaning 'inflation - an increase in the money supply.' Instead of just using a term like money expansion, they have co-opted a term with an accepted meaning and muddied the waters. If I were less charitable, I'd propose that this confusion is intentional so as to sell things like gold and gold funds and to maintain a level of fear in segments of the population when actual economic outcomes aren't what you expected. Is a general rise in the price level hard to measure with precision? Sure. But, CPI and the billion price project do a reasonable job of determining if there is a prevailing, general increase in prices. Sure, everyone's consumption patterns are different, so increases in one sector might effect me differently than anyone else, but that's immaterial to the notion of a high-level movement of prices over time. Is there significant inflation in the US economy at the moment? No, not really. Has there been a broad-based decline in purchasing power over the last 3-5 years? Not really. I haven't seen it. My cost of health care has gone up. my cost of housing has gone down considerably. Food costs are up in spots, but not egregiously so across the board. An expanding money supply isn't inflation if the velocity of money is declining.

Excellent interview. Thanks for sharing.

The whole notion of considering ROI on education spending is an interesting one. I had a GF back in the day who decided she needed a PhD in Psychology. She wound up going to a private college in Southern California where she was on track to rack up something like $150-200k in student loans while she got her degree. While she conceptually understood what she was doing, she knew so many people who had gone that path that it seemed reasonable to her even though she could do the math on debt repayments and her likely salary range. We "broke up" during her first year (not for financial reasons), so I don't know how that all worked out for her. Would I have broken it off for financial reasons at some point? I don't know. Things worked out fine for me, as a soon met the girl who would become my wife. She was, and still is, a gainfully employed civil engineer with no school debt.

Am I understanding correctly that the market for attorneys is such that a reasonably intelligent graduate of a low to mid-level law school should not expect to make more than $25-30,000 per year starting out, and have limited expectations for that to improve? And that one could rack up in excess of $200,000 in student debt on their way to an annual salary that is meaningfully less than my first job out of school as a project manager at a small nondescript market research company close to 20 years ago? Am I getting that right? WTF would anyone go to law school under those circumstances?

Also recall that the weapons of mass destruction comment was not long after the General Re purchase. Warren moved quickly to significantly reduce the derivatives book at General Re, incurring losses along the way. From the 2008 Annual Report: I think he saw what was happening inside General Re and started to realize how dangerous the derivatives practices at large financial institutions had become. He may have seen the the potential to destroy Berkshire in those contracts and knew what needed to be done. Booking $400 million in loses on those contracts may have been one of the best investments Buffett ever made -- consider how badly that might have gone if those contracts blew up during the crisis.

Your best option here is to minimize costs and choose a small collection of the Vanguard funds in an asset allocation that is reasonable for you. Also might want to clarify the distinction in your plan regarding the investor shares vs. Admiral shares vs. institutional shares. For example, the VFINX and VINIX are both S&P 500 index funds with the difference, as far as I recall, being the amount of funds invested. I'd think your plan would give you access to the institutional shares which has a significantly lower mgmt cost. If so, the institutional shares of the VINIX and VBTIX should be the backbone of a cost-minimizing asset allocation strategy.

http://www.charlierose.com/watch/60286194 Some limited discussion of IBM at the 42 minute mark. Little more than the quote that IBM will have record EPS for the year.

For me it depends. If the repurchases fully go to reduce share count, then I ignore that (don't subtract it from operating cash flow). If the repurchases are just a way of masking the dillutive effects of stock options (e.g., a lot of tech stocks) then I consider it a cost to shareholders and so I will adjust my FCF estimates as a result.

Great interview. Thanks for sharing.

Thanks for sharing. Excellent resource.

The 2011 Annual is available at the Goodhaven site (linked in my first response earlier).

There is a 2011 semi-annual report. I found it at the SEC search site for GOODX: http://www.sec.gov/Archives/edgar/data/811030/000089853111000287/ghf-ncsrs.htm Not sure about a .pdf though.

There aren't a lot to collect. The annuals and the recent (2013) semi-annual are available at their site: http://www.goodhavenfunds.com/fund/shareholder_reports.html Here's a link to the 2012 semi-annual: https://materials.proxyvote.com/default.aspx?docHostID=137176 If that doesn't work I can email it or post it to a public dropbox. I don't know if there was a 2011 semi-annual. I'll poke around my email to see if I got any notices before 2012.

Good read. Thanks for the link. This reflects my general feeling at the moment, but it hasn't worked it's way into my overall asset allocation since I like the stocks I own . . . And, just for fun you can see some pictures from the wedge on a reasonably big day (last week) here: http://photography-on-the.net/forum/showthread.php?p=16010606#post16010606

Which one has pricing power and more predictable future prospects?

BRK -- 36.8% WDC -- 18.6% L -- 13.25% MSFT -- 12.4% FFH -- 7.2% FAIRX -- 6.6% Cash -- 2.65% AAPL 2.5%

There aren't many people who don't like upside volatility. I like Marty Whitman's idea that risk should always be qualified with an adjective. The search for one unifying risk measure is likely futile and perhaps dangerous if it stops people thinking about the different risks they face. Amen. There are many kinds of risk; most are not measurable in any real way. Ex ante, you're lucky to understand them in a very general way.

Barrons highlights an analyst report that responds to Chanos: http://blogs.barrons.com/techtraderdaily/2013/05/09/stx-wdc-needham-blasts-weak-unclear-chanos-remarks/?mod=BOLBlog WDC is still my second largest holding . . . I tend to see things the same way as the analyst, not surprisingly. It's fair to say that I didn't hear exactly what Chanos said, but the reports about his presentation did seem like he made some pretty weak arguments (that have been around since at least the beginning of htis thread). I don't know the details of the management stuff at STX, but I'm pretty comfortable continuing to hold WDC at this point.

Thanks for sharing netnet. That's a nice collection of articles and a good variety of ways to look at BRK. Although I take issue with a bit of what they put together, they ultimately land on a fair value estimate of $187,500 per A share ($125 per B share). This happens to be exactly where my slightly modified two-column spreadsheet winds up for current value. It's also right in the neighborhood of the basic two-column approach they said they didn't like. It is also almost right on the "More Conservative" scenario for the Intrinsivaluator (http://www.creativeacademics.com/finance/IV.html). So, quibbling aside, the end result is quite reasonable to me.

In short -- Nope. The experience of 2008/09 for BRK and FFH should be a good example of how strong companies like BRK and perfectly positioned companies like FFH still get taken to the woodshed in a significant market correction. Perhaps they didn't get hit as badly as the rest of the market, but they weren't a hedge. BRK held up a little better early on, but peak to trough still lost 50% during the correction. Having cash available in late 2008 and early 2009 to buy insanely cheap stocks did much better than BRK through 2010. Buying SHLD under 30 and Timberland and Gentex under $10 and seeing them double and triple by the end of 2010 was much much better than holding BRK. Cash and puts can be good hedges for market risk, but even the best stocks are not. That's my lesson from 2008/09 anyway.

8K: http://www.sec.gov/Archives/edgar/data/927066/000119312513204531/d533361d8k.htm Standstill Agreement: http://www.sec.gov/Archives/edgar/data/927066/000119312513204531/d533361dex991.htm

Summary of a Gartner study on the HDD vs SSD choice for enterprise users: http://www.storagenewsletter.com/news/marketreport/gartner-ssd-hdd Largely consistent with the themes laid out by WDC and Seagate, I think. Key points include SSD speed benefits not needed in all storage uses, and thus not worth the cost. Building the capacity for NAND development to replace existing HDD storage is infeasible due to cost for the foreseeable future. I expect that ASP and margins for HDD will compress over time, but overall demand for storage continues to grow exponentially and HDDs will have a huge share of that. Still long WDC, but a little sad about lightening up my position a few months back. :(

Here's a link to a short story about it. Not much more info than the OP though . . . http://www.businessinsurance.com/article/20130425/NEWS04/130429867?tags=%7C306%7C76%7C78

Oh the regret of selling too soon. As far as problems go . . . it's not a bad one to have.

Excellent video. Thanks for sharing.