WneverLOSE

As I expected, nothing about controversial stuff like record margin loans by investors, the gamification of investing by brokerages, retail frenzy, SPACs, questionable business models, market valuation, how much gamestop he owns ::) etc.

I'm trying to understand the power of Berkshire float, I have a basic understanding of how it helps, if investor A has 100$ invested at 10% at the end of the year he will make 10$ (or 10%) and if investor B has 100$ and he gets 20$ from a friend who tells him "Hold this money for me for a year and I will pay you 1$ for it" he has 120$ to invest and he earned 13$ that year (12$ with a 10% return and 1$ from "underwriting profit") for a 30% advantage due to float. But in the real world things are not so simple, in order to get float you have to have some of the 100$ invested in the operation of getting float, you have to buy a building, office chairs, computers and so on in order to generate this float and underwriting profit, so if you invest out of the original 100$ something like 30$ to generate 20$ of float you only have 90$ to invest so I was wondering if someone here can walk me through Berkshires historical numbers and how much capital is invested in the insurance businesses in order to generate how much float and how much "leverage" that float generated for Berkshire.

Dumb investor here, Can I buy oil futures using a discount broker ? what happens if I don't sell it ? will I get a barrel with my name on it in Cushing Oklahoma I can take home ? Why wouldn't everyone do it and store the oil in their back yard and flip it for 20$ next month for a 40x return in a month ?

mhdousa thanks for informing us, we really appreciate it. I wish him health and a strong comeback in the future. Really sobering to think about how fragile things are, a great money manger I looked up to for years is having medical issues and the CFO of a common investment we share (JEF) has died from COVID-19 :'(

It would be nice if someone can link info why they think he blew up his fund (Nothing in Google I could find) or that he has medical problems. I can see that the website is down but there are no SEC fillings since the 13F was filled. It doesn't make any sense if he blew up his fund to transfer LPs to Brave Warrior (since all the money is gone...) I have seen a post on reddit from 5 months ago claiming he had a ski accident but he was active since then so I don't think it has anything to do with it (or if it is even true...) I like his letters and have followed some of his investments, did well on some and really bad on others but I didn't blow up and my performance is much worse than his (so only leverage is an option but I remember he said on one of his letters that he only used it during the panic and I thought he didn't use it anymore)

It would really be a shame if they (i.e me as a shareholder) held those hedges for so many years with such great cost to shareholders and we get deflation as soon as those hedges expire

Interesting to me is that out of the thousands of investment professionals that would kill to be in her position Buffett chose her out of school at the age of 25 (my current age 8)) Interview with her from 2018 : One day this forum will have to be called Corner of Berkshire, Fairfax, Boston-Omaha & Tracy Co. with all the new mini Berkshires around

If I can jump in with a question, why should investors ignore real estate depreciation ? (When they use FFO as replacement to net income) Buildings and parking lots also get old, crumble and need design changes to keep them looking attractive and serve changing needs...

How do you get the performance number ? I thought just by looking at the positions that it might be more like -10%.

Question : When a company issues stock options they expense the cost of the options to arrive at the net income figure. but the cost is only a forecast, they calculate the cost using the black scholes model. lets say the options are for 3 years, and were given at the first year. during that year the net income figure took into account the value of the options at the time, but by year 3 the stock did so well the options are worth much more. so during the first year the net income figure shown to investors was too high. What happens on year 3 ? The company get the value of the options it issued and in exchange buys the appropriate amount of stock on the market and flips it to the employees (buying it at a premium) so net the company cash outflow was bigger than the inflow from the options. (employees got paid much more that what initially thought, thus leaving less for shareholders) by my best understanding the income statement doesn't recognize that shareholders wealth was lost by that. How does one calculate the true earnings if a company stock keeps rising by so diverting income from shareholders to employees ?

a TLDR summary would be nice 8)

Any way to listen to the conference call without actually calling the number for a playback ? Not only it is very expensive to overseas investors but it is very inconvenient to sit for an hour on the phone. am I missing something or is fairfax basically the only company that doesn't provide a transcript / playback on their website ?

-7.3% Time Weighted Return (USD), I bought a lot of things just before the indices started to go down by 20%. I am going to add around 10% of cash I was holding to a new position, hopefully my holdings bought back a lot of stock and helped me dollar cost average along the way down (about -30% down from inter-year highs). I am actually happy with the year, it is the first down year for me (started investing only a few years ago) and I was impressed by my psychology, I still like the companies I hold, I know I will make money in the long term and I am not frozen in panic like lots of people I know when facing stocks that are getting more and more attractive by the day. unlike many other players in the market I actually hope it will keep going down, I am a net buyer with 60+ years (hopefully ;D) to go, low prices are a blessing for someone like me.

https://www.cnbc.com/2018/05/30/warren-buffett-reportedly-offered-uber-3-billion-investment-but-talks-crumbled.html Interesting that he confirms the talks, now if he doesn't confirm or comment on other roamers he is basically denying them

It doesn't say when it will be out or how but it is in the working, the company that did the photography is working on converting all the footage to a digital format. The newspaper is owned by Berkshire so little doubt about the accuracy of the reporting in my opinion. Very exciting news, hope they won't be too greedy and charge money for it ::)

"Warren Buffett plans to release video archive of past shareholder meetings" http://www.omaha.com/money/plus/warren-buffett-plans-to-release-video-archive-of-past-shareholder/article_06c5c9f3-6133-523c-a7e9-5d7cdea8d677.html 1,000 hours worth of videos going back to 1994 ! ;D ;D

Snorky any news ? I see that ValueWalk had an article that they since took down titled "Putting Buffett To Shame" (EDIT: Article URL and name just got changed, it's here https://valuewalkpremium.com/2018/02/arlington-value/) and this is the piece of the article that was available to read for everyone : Any thoughts about the difference between the holdings performances and reported gains ? is leverage in the BRK holding enough to explain the delta in performance ?

globalfinancepartners how does that actually work ? let's say a insurer holds a subsidiary that has 1000% ROE with zero leverage. It has basically no tangible equity so if regulators count tangible equity towards regulatory capital this will skew the picture a lot since this business is worth much much more than it's tangible equity and if needed can be sold for that amount and it generates a ton of cash each year that can cover any insurance losses. on the other hand a low quality business with high capital needs and large base of long lived specialized assets may look like it has lots of capital that can be used for paying claims but in reality it is far from it.

Hi, I was wondering if someone can help me figure out how much money can be used for business acquisition / common stocks investments ? by what I can tell most of the money is in the insurance subsidiaries, due to regulation dividends to the parent company are regulated to make sure enough money is left for paying claims and I would guess investments are also regulated for those subsidiaries (or a insurance company can invest 100% of its float at triple leverage bitcoin etf ?)

wow thanks for the detailed answer this helps a lot ! :) no more questions for now, I think I got it.

rb you are right, I accidentally looked at the global real estate worth. After reading your answers, looking at some Wikipedia articles and doing some thinking it makes sense. I have a bit more difficult question now, how is it that the money supply grew so fast after 2008 but we didn't see inflation ? It would make sense if the total credit in the economy would fall to offset the rise in the money supply but I can't find any data point showing that it is infect the case.

Hi, I have lots of questions I would like to ask about economics so I thought I would just make a thread and ask them all combined. I would like to start by asking how come the world has less money than the value of its assets ? by what I understand even if I had all the money in the world I still wouldn't be able to buy half of the real estate in the united states, is this true ?

Yes. And I'd argue that inflation hurts the elderly who are trying to live off of their fixed savings far far far more than it hurts the super rich who have investments which more than keep up with inflation. When you are at the grocery store and see the elderly cashier ringing up the other elderly woman's cart full of cat food you have seen the effects of inflation. no_free_lunch Well maybe I didn't explain myself correctly, I am going to pass from one subject to another, I don't understand why would you think I was only going to talk about inflation, My intention was just to start the conversation. What does it mean when you say you don't like that I am talking about inflation ? isn't it (or should I say the lack of it) part of bitcoin ? so why shouldn't I speak about it ? rkbabang I don't really think your criticism about inflation is really about inflation. Isn't it about not having proper financial planning ? If I am a retire that saved enough money why is inflation hurting me more than the 1 percent ? both of us have our wealth invested just that my money is more in a fixed income than his. still i'm getting my income stream and the market is pricing the security for proper real return. Why do you think inflation hurts the elderly "far far far more" ?

Idea: I am going to play devil advocate, I am asking cryptocurrency bulls (and especially bitcoin) to imagine they are speaking to a smart but skeptical journalist writing a story about bitcoin and try to explain to him your part of the story. Rules: Each time only one person can reply to my response, their reply can be about the subject my last message was about (if I wasn't convinced) or about a new merit of Bitcoin you would like to bring up. I am only one person with limited ability to respond, if you feel that something you have to say is so important and you don't get a change to say it in time please write it in short and I will reply to that message as well :) My objectives are as follow: 1) Challenge my beliefs and knowledge about bitcoin. 2) Practice not being a true believer as Charlie would say. 3) Provide an interesting dialog that can be read by everyone and will be short, interesting, insightful and with little repetitive arguments. I would start with a criticism I have with one aspect of bitcoin. Many people argue against fiat currency on the bases of store of value. The argument goes that since all fiat currencies have no element of scarcity it will always be inflationary. Bitcoin on the other hand is a much better store of value than dollars since it is not controlled by a central bank and limited by supply. I don't deny the fact all fiat currencies are subject to inflation, that's true. The value of the dollar has lost more than 90% of its purchasing power in the last 100 years. But at the same time all wages have gone up with inflation in the long term. I am arguing inflation is a force of good rather than evil and that how I see it: Think of inflation as a hidden tax on wealth and as an equilibrating power. Those who hold large amount of wealth get poorer each day and those who live paycheck to paycheck aren't affected by inflation (assuming wages keep up with inflation). Moreover, inflation is a strong behavior instructor, since everyone knows that if they sit on their money it will get worth less and less each day this incentives investment (in companies, technology and infrastructure) thus benefiting society, just imagine what would happen if there was no consequence for sitting on your wealth. It would be great if someone can challenge my view on wealth inequality inherent in the bitcoin design and the effects it will have on society.

Great interviews ! thanks for sharing.