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roberts1001

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  1. Thank you to all for your helpful input.
  2. Please have patience with someone new to this board. I'm trying to estimate FRFHF's IV. From a quick and dirty look I'm thinking of something like 1.0x BV. Does this seem about right? Thank you for your input.
  3. Maybe Japan requires disclosure of positions over 5%? Also a thought about the investments... Maybe someone here has some insights. I find it an interesting investment approach to buy all of the largest companies in an industry that is important to the economy, and which operate as an oligopoly. Buffett has done this with railroads, airlines, arguably banks, and now Japanese trading companies. He could just as easily have purchased stakes in five, unrelated, Japanese companies, but he chose to buy stakes in all of the major companies in an oligopoly. This seems to me to be more specific than just buying a basket of companies in an out-of-favor industry. Thoughts?
  4. Wabuffo, thank you for sharing your analysis of how much money should be subtracted from the investments column in a two-column valuation. I have to confess that like many others I have not been subtracting anything from the investments column. Perhaps this is why my two-column valuations consistently come in at the high end of the various valuation models that I use. It makes sense to me that liabilities against the investments should be subtracted. Liabilities would include borrowings for the purpose of making investments, deferred capital gains taxes and future insurance claims. One question I have is that while 100% of float will eventually be paid out in claims (unless claims are matched by new premiums), shouldn't the liability for claims be the present value of those future payments? That might bring the liability down to 20% or 30% of float. Forgive me if I am being slow. Thank you for explaining. roberts1001
  5. Makes me think about doing the same. Buy a Japanese stock or fund and then hedge the currency risk using FX, receiving about 2% in interest on the USD/JPY FX contract (at current interest rates). Maybe buying something like iShares Japan Value (EWJV) with a P/E of 9.77. Or maybe something like UBS. The Swiss stock market is expensive at a P/E of 22, but UBS has a P/E of 10, a P/B of 0.75 and a dividend yield of 6.35%. Then hedge the currency risk using FX, receiving 2% interest on the USD bought and paying negative 1% on the CHF sold. I'm not saying EWJV or UBS are good buys, or that FX hedging is a good idea, but it's something to think about. Then again, maybe I should stick with what I have, which at this point is pretty much just BRKb and cash. Wishing success to all.
  6. Could someone please help me understand the Japanese notes? I have a couple of questions: 1. Am I correct that if Buffett wishes to convert the $4 billion in yen that he has borrowed into US dollars, he can buy USD on the foreign exchange market while selling yen? If so, while the contract is open doesn't he earn about 2% in interest on the USD bought and pay about negative 0.1% interest on the yen sold? Or do I have that backwards? 2. Why issue notes in Japan instead of Switzerland where interest rates are lower? Thank you for your help.
  7. It sure looks cheap, on either an asset basis or on an operations basis. On an asset basis PTR's ratio of enterprise value to proven reserves is $7/barrel of oil equivalent. On an operations basis PTR is selling for a PE of 7, based on either trailing 12 months earnings or estimated 2008 earnings.
  8. Just a few comments on Tilson's valuation: 1. I've argued, too, that the insurance businesses are worth more than just the value of the investments, provided that the combined ratio over time is less than 1.0. However valuing the insurance businesses as investments plus 8x normalized earnings seems to be a little bit of a stretch. 2. On the other hand, valuing the other operating companies at 8x operating earnings is pretty conservative. Most people who use this model use 11x-13x. Happ8714 applies different multiples to different types of subs. I like happ's approach because it helps to understand the various businesses better. 3. If we apply Tilson's math to Dec 31, 2008, we get an IV of 77,793 + 8*5000 = 118K. I'm not sure what number to put in my summary as Tilson's estimate as of Dec 31. He doesn't explicitly say $118K for Dec 31, and less than one month ago Tilson said that BRK was conservatively worth $130K-$140K/share. That was before the annual report came out, though. Changinging Tilson's estimate from 135K to 118K moves the average for the seven authors from $131K as of Dec 31 to $129K.
  9. http://www.geocities.com/roberts1001/BRK_IV_estimates.xls
  10. Each year I collect IV estimates that appear in the press, on TV or on discussion boards and summarize them in a spreadsheet. I typically find 15 or so estimates. It's only been a few days since the annual report came out, but so far I've found estimates from seven authors. These IV estimates are calculated using a variety of different models, including float model, discounted cash flow, investments-plus-multiple-of-earnings, etc. In the spreadsheet I cite the reference so that people can read each author's analysis firsthand. Somewhere during the year I usually hear or read IV estimates from five or six of the fund managers who hold BRK stock. In addition some very good analyses come from non-professionals. All estimates are welcome, but preferably with an acompanying quantative analysis. If you you have run an IV analysis yourself, or if you have seen one published, would you please let me know so than I can add it to my collection? I'd be happy to upload the spreadsheets for Dec '05, Dec '06, Dec '07, and the spreadsheet that is in progress for Dec '08 if we have a files section here. Or I can post them on Geocities with links. Here are some statistics for the estimates that I've found so far this year: Estimates of IV as of Dec 31: Number of estimates: 7 Range: $117K-$148K Average: $131K Median: $128K Stdev: $11K IV range, number 110-119, 1 120-129, 3 130-139, 1 140-149, 2 Note: Many authors state a range for IV, not a single IV value. In order to calculate the average for the different authors I use the midpoint of each author's stated range, unless their wording implies some preference. If their wording implies a preference for, say, the upper end of the range, then I infer a "best estimate."
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