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EricSchleien

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    Buffett's Early Investments

    in Berkshire Hathaway

    Posted

     

     

    Thanks for the article, but I am not convinced by the thesis. In the 50's and 60's buffett invested in 400 companies total so the majority must be cigar butts. They must all contribute to his overall results, because if he was getting 30-50% a year he cannot have laggards in his portfolio....

     

    I'd love to have list of his holdings back then (not just the 5 or 6 mentioned in snowball and other books)

     

    Buffett had/ has laggards like every one else operating at similar AUM - the difference was the upside of his winners.  Although we don't have details on single-pick gains from the BPL days I think the best modern analogue is M Burry's early days at Scion.  In the first year he was up 55% gross while the S&P was down 10% - and that was all because of a single value stock in his portfolio that was a 3-6 bagger depending on the cost basis.  A number of his other picks (especially airlines in 2001) went nowhere.  This is a power law world.  You don't make 55% in a year by owning 10 equal-sized positions that each go up 55%.

     

    Buffett did 30% gross at BPL.  His claim that he could consistently do 50% a year is bogus in my opinion unless he was managing <1M in inflation-adjusted dollars.  He has really done the community a disservice by saying that IMO.

    His 50% a year claim was in the 50s, before buffett partnership. Those were the years that sent him into his first "retirement" at 26. In fact, he said exactly what you said:

    "It's a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that."

     

    I believe it. I see businesses all the time selling for 1.5 - 2x earnings at that small of a level.

    Looking for Podcast Interviews

    in General Discussion

    Posted

    Hi, looking to interview people for my podcast. You can find the link here: intelligentinvesting.podbean.com

     

    Some notable people who have been on:

     

    - Nate Tobik

    - Tobias Carlisle

    - Anthony Morley

    - Travis Wiedower

    - Adam Mead

    - John King, author of New York Times Bestseller "Tribal Leadership"

    - Erin Houston, CEO of wearwell

     

    Downloads: The average episode now has 1,200 unique downloads. That means 1,200 different set of eyeballs/episode.

     

    The CoBF community has been a great resource/community and many of the people that have come on the podcast I found through here.

     

    Please message me if interested.

     

    Best,

    Eric

    Cryptocurrencies

    in General Discussion

    Posted

    Munger said people will just make more bitcoin. However, I was under the impression it's set up so that can't happen. Can someone who understands this better than me explain whether Charlie is right or wrong and why?

     

    Thanks

    Well Run Banks

    in General Discussion

    Posted

    This year I've decided to start learning more about the different banks out there. It's always been something I've mostly avoided. Does anyone have a good list of well run banks. Would love to start learning and also reading shareholder letters. Market cap size doesn't matter to me.

    FRFHF - no bump because of tax reform?

    in Fairfax Financial

    Posted

    I was thinking more stuff like this...

     

    Seaspan Announces Letter Of Intent For Potential $250 Million Unsecured 5.50% Debenture And Warrant Investment From Fairfax Financial Holdings Limited

     

    http://www.seaspancorp.com/press-release-post/seaspan-announces-letter-of-intent-for-potential-250-million-unsecured-5-50-debenture-and-warrant-investment-from-fairfax-financial-holdings-limited/

     

    This is THE David Sokol btw

    What are you buying today?

    in General Discussion

    Posted

    Sold 85% of my MKL today and bought more BAM.

     

    Nice! Sold MKL the same day. Also own BAM & PVI ;)

     

    Rkbabang & EricSchleien1:

    I like BAM for their management, alternative investments, and ability to deploy capital wisely during downturns. Plus, am able to buy in C$s. I too have been adding to BAM recently, while continuing to hold previous investments in BIP (Brookfield Infrastructure) and BEP (Brookfield Alt Energy). Also adding to recent Brookfield spinoff : TSU - Trisura. So overall I'm bullish on Brookfield.

     

    My question is why are both of you selling MKL? I bought into MKL a year ago with the idea of it being a BRK like stock that could be held for a long time/forever. After a 25% gain in past 12 months, are you finding it overvalued? Has there been a structural change at the company that caused both of you to get out?

     

    Thanks,

     

    I have more ideas than capital. Markel is a bit too pricey to me at these levels. Re-allocated into other positions which are more undervalued IMO.

    What are you buying today?

    in General Discussion

    Posted

    If I knew that RE is going compound at 12% going forward 5-10 years, I'd buy tons of it.

     

    I don't think there are (m)any opportunities in current market that offer 12% going forward. (IMO neither BRK nor FFH do; 12% is reachable for both just far from certain).

     

    I doubt that RE (or AXS) can do 12% going forward either. I think that (re)insurance is still soft and gonna remain soft. Plus fixed income returns are crappy.

     

    Got it. Different strokes. I think there's much cheaper shit out there. But that's what makes a market.

    What are you buying today?

    in General Discussion

    Posted

    recent buys are MLPs - BPL and SEP, which seem to have come under selling presssure (tax loss selling?)

     

    I also bought some RE - a solid up insurance company that got hit by the hurricane season (like just about anyone else in the industry) , but has a very solid history of book value growth and reserving history. I think the latter is a better buy than BRK right now.

     

    RE has compounded BV at 12% since 1995. You don't think there's better stuff out there? Do you think they will compound higher in the future? Paying around book value seems good but can probably do better, no?

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