twacowfca

It's a very good book, easy to read. :)

that doesn't mean stock certificates didn't exist prior to the IPO stocks can trade OTC Ford had bought out his investors by 1925. The last to sell made 250 times their original investment. :)

Not necessarily. Take BAC. It looks like the fund had 0 shares at 9/30/11 and then it becomes an 11.4% position at 12/31/11. BAC closed the year at $5.69. It is now $9.85. If he chose to take profits on his gain is that a trading fund or good timing on buying something cheap and seeing it trade back toward fair value? He seems to be trading intelligently from a value perspective like many people on this board. He picks stocks that apparently have genuine intrinsic value and are bargains after they have sold off more than 50%. He sells them as they rise and approach IV. As a small fund manager, he is more nimble than those who manage large amounts. He did not ignore the macro environment during the financial crisis, but adjusted his cash position to be able to take advantage of opportunities as they presented. He may be a lurker as he pulled the trigger on BAC at the perfect time just as skeptics on this Board ( "C'est moi."-- in the immortal words of Miss Piggy) finally agreed that BAC was a deep value bargain. :)

Warren, to his great credit, hasn't said anything publicly about the rift with Alice. Warren's instructions to Alice were to tell it all, including the personal stuff, without sugar coating anything. In this, she followed his instructions. After publication, the other women in his life disliked having the unflattering parts of his life exposed for the world to see, especially the sadness of all the circumstances about his first marriage and Susan's death. It was especially hard for them when Ms Schroeder departed from her usual objectivity and characterized the other women around Warren as "Daisy Mae's", meaning bimbo groupies. That was the last straw that broke the back of their patience. Warren then had no choice. It was risk the wrath of one woman feeling scorned or having every other woman in his family and circle being mad at him.

I thought about that after I posted it, text does a poor job sometimes conveying sarcasm :) I was tempted to post all of my counter points to this article but I think I'll save my breathe. One question though for folks, I follow WEB fairly closely and I do not remember him ever "table pounding" telling investors to buy BRK. Anyone know of anything that backs up this statement? I assume she just using her artistic license WRT to the buybacks. If anything I think I have heard him say at the AGM that he would not buy BRK if he was a smaller investor because there are plenty of cheaper great companies out there. EDIT: The more I think about it she is probably talking about this years letter, but I guess that did not come across as a Cramer style "BUY BUY BUY" to me. Warren didn't exactly say, "Buy BRK." But, as our poster, Charlie pointed out, he did say in his letter in three different ways that BRK is very undervalued. Schroeder's critical tone is best explained by the saying, "Hell hath no fury like a woman scorned."

It's good to have a firm general idea about why a company is both a better business and a bargain before investing. This is much more important than engaging in paralysis by analysis. If a company isn't a better business, stay away from it even though the price may be a bargain. Wait until it's an unbelievable bargain, and even then don't buy unless the company almost certainly is going to be a survivor. :)

Looks like they expect a big pullback in common stock prices in the next three years with potential for deflation and then a rebound with very good returns over ten years. They appear to have timed their exit from long treasuries near perfectly as the potential for more gains going forward is slight. Their runoff results are amazing! They lost $1.5B on their crummy value trap and bottom fishing stocks in a flat market overall. The equity hedges didn't help much. And they still had a 6.9% investment return. Unbelievable!

I ran into a problem with this approach recently. My grandfather had purchased shares in Cominco for my mother when she was a young girl. I recently found the original share certificate in my mother's safe deposit box when I added a copy of my will. My mother had no idea that she should be doing anything with the certificate. I contacted Teck Cominco Investor Relations about this share certificate and received the following reply: Thank you for your inquiry to our website. Consolidated Mining and Smelting Company of Canada became Cominco Ltd. which merged with Teck Corporation to form Teck Cominco Limited in July 2001. Unfortunately shares of Cominco needed to be submitted for exchange prior to the 6th anniversary of the merger (July 20, 2007) or the shares were deemed surrendered. Following is the excerpt from the Plan of Arrangement. “Pursuant to the terms of the Arrangement, any certificates formerly representing Cominco Common Shares that are not properly deposited with the Depository together with a duly completed and executed Letter of Transmittal and any other documents the Depository reasonably requires, on or before the sixth anniversary of the Effective Date, shall cease to represent a right or claim of any kind or nature and the right of the holder of such Cominco Common Shares to receive Teck Subordinate Voting Shares or any cash consideration shall be deemed to be surrendered for no consideration to Teck, together with all dividends or distributions thereon held for such holder.” It doesn't seem right that the company can forfeit your shares and about 30 years worth of unpaid dividends, but there you have it. file it under: "the dangers of leaving share certificates as a gift for the financially illiterate" Yes there are dangers like this in the safe deposit box strategy, but there may be more protection in the US against such loss than in Canada. Warren relates how Blue Chip Stamps acquired a company that once gave away penny stock to gas station owners that agreed to distribute their stamps. These shares were considered near worthless and were soon forgotten by many station owners. When Blue Chip merged with BRK decades ago, shares held by each of those station owners were entitled to receive one share of BRK. Many of the shareholders, however, could not be located. Warren tells how every so often they get a letter from someone who has found those old shares in a box belonging to a relative who just passed away. Upon verification, the heirs are issued one share of BRK that they are still entitled to. That's one A share. :)

That's just crazy. Why not just not charge the woman? I'm 39 now and my wife is 36, but when we started seeing each other I was 18 and she had just turned 15. I could have been charged with a crime. Luckily I wasn't, but if I had been, a good solution wouldn't have been forcing us to get married before we were ready. We did get married 6 years later when we were ready. Why not just admit that it's "statutory rape" laws that are the problem in the first place. The government passes one law that causes a problem then workarounds need to be found. Just like with gay marriage. Why is marriage a government thing to begin with? Why are people treated differently depending on who they have sex with? The world marriage shouldn't be in law anywhere. If you want person X to inherit your belongings that is what a will is for. If you want to get "married" that is a contract or a religious commitment between you and (one or more) other people, it should have nothing to do with the government or with law. Other than maybe contract law. --Eric These are good questions. But think about the most basic question. If there were no statutory rape laws, or other laws to the same effect, adults performing sex acts with children would be perfectly legal. Children are easily led or commanded. They have limited ability to fight off a predator or even identify a possible predator. Children have limited capacity or no capacity for informed consent. In my opinion, they are deserving of the protection of the law. Without this protection, we might revert to a revenge system of justice.

Holy F@$#... What state do you live in? Actually let me Google that... And what do they consider to be "a child" exactly? And my answer would be if they're going to allow a child to be given away for marriage, why do they draw the line at the gender of two adults wanting to get married... Crazy It's a generally good law intended to cover the situation when a pubescent girl gets pregnant by an older teenager or even by an adult. Willing or not, this is statutory rape with possibly years of jail time. However, if the parents approve, and the usually young lovers (remember Romeo and Juliette?) are allowed to marry, there is no crime. There are abuses of the intent of the law, even without throwing homosexuality into the pot. In one of these cases, a thirty something year old female teacher took a 13 year old boy student in her 7th grade class as her lover. She was kept in jail because she wouldn't stop seeing the boy, but she got out before the trial. Then, she married the boy with his parents permission the day he turned 14, immediately before the trial was scheduled to begin. Case dismissed.

Read it for yourself: http://www.huffingtonpost.com/2012/01/01/rick-santorum-would-invalidate-gay-marriages_n_1178450.html http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/03/02/BA3Q1N9EV9.DTL In my state it's legal to take a child bride if the parents approve. Should it also be legal to consumate a homosexual marriage to a child if the parents approve?

Whew! Looks like radio isn't the only place one can find over-the-top generalizations. Realizing that people like Limbaugh were about to light a powder keg about the Muslim peril after the 9/11 attacks, we should all be eternally grateful that President George W. Bush threw cold water on that xenophobic fuse with his measured response focusing on the terrorists and not innocent coreligionists.

That's news? Fay Wray could have told you that. :)

I think Ron may have also bought shares a few months ago. BRK is the ultimate stock for passive investors. Buy it. Request actual share certificates. Put the certificates in a safe deposit box. Then, many years later, your surviving children will open the box and scream, "We're rich!"

Same here. I would occasionally listen to him years ago, and some of his arguments were well thought. But then, he developed a harsh edge. Then worse. Then, over the top. Rush is an apropos nickname considering his reported drug use. Could that be related to his rages?

I would argue the liabilities are not completely costless. On average, yes, they are. But if someone told you if you to take a bet, where if you roll dice and get snake eyes twice in a row, you owe $1 million; but if you don't row snake eyes twice in a row, you receive $772, would you do it? The offer has an expected value of 0 (same concept as an insurer with average CR of 100), but that doesn't mean the payout will be 0 on any given roll. Insurers face large tail liability. Do not take that risk on for free. By adding in the full value of float liabilities (or taking the full value of investments), you are taking the risk on for free. EDIT For the record, I would think the value of berkshire is somewhere near 150k, similarly to tombgrt. This would imply about a 10x multiple on op-earnings (calculated by buffett, not tilson, and a 20% haircut to investments (to account for tail risk & tax inefficiency). That's reasonable. But BRK is worth much more than any of these estimates of IV because the companies in its stock portfolio and its key non insurance operating businesses are very high quality with extraordinary, long term competitive advantages. :)

??? What relevancy does that have? Berkshire does not post collateral daily to its shareholders. In practice, the stock has not and will not trade as if there is an embedded put. During times of crisis (financial or cat-insurance related), Berkshire runs the risk of losses (just as its peers), and the stock will fall. Fundamentally, this "put," as it was stated, has no value (but may offer technical support). If a mega-cat event (9.0 earthquake on sanfran, cat 5 hurricane on new york) happens, Berkshire will have 10's of billions in losses, the stock will fall with the rest of the industry, and buffett won't buy back a dime of stock in order to remain financially sound. I agree that BRK doesn't trade as if it has an embedded put. I like this. :)

One small caveat to this though is that Buffett has not committed to buying at 110%. He may, he may not. I think he's clarified that a couple times. In particularly weak markets he may have better opportunities and he doesn't want traders to think he'll always be there to buy at 110%. With that said, it does seem likely that buying at these levels should result in investment returns at least equal to the growth in BV. But it's not quite riskless. Completely agree. :) Furthermore, while this "put" provides some technical support, it is of no real fundamental value. Would fairfax have bought its CDS on MBIA from MBIA? No. Why? Because such a contract would inherently be worthless. Buying a put contract on goldman sachs with goldman sachs as the counterparty would similarly be of little value. This isn't a contract. It's better. It's a commitment that will enhance long term shareholders' value more than a contract that might bind at the wrong time. This commitment to buy back shares aggressively below 110% of BV, unless that would stress the company financially or prevent seizing even better opportunities, is in perfect alignment with long term shareholders, including the Gates Foundation that is required regularly to sell a small percentage of shares, regardless of price. BRK has been a prolific FCF generator, even during the financial crisis. That's what gives value to the commitment.

One small caveat to this though is that Buffett has not committed to buying at 110%. He may, he may not. I think he's clarified that a couple times. In particularly weak markets he may have better opportunities and he doesn't want traders to think he'll always be there to buy at 110%. With that said, it does seem likely that buying at these levels should result in investment returns at least equal to the growth in BV. But it's not quite riskless. Completely agree. :)

None of these analyses give a penny of value to the embedded put at an increasing strike price on average quarter by quarter. Whenever BRK trades close to 110% of BV as it does now, the value of that perpetual put will add at least 20% to 30% to the value of holding the stock. If one were of a mind to use margin, BRK could be levered up now very likely with less risk than holding a spider without margin. Andy, now's your big chance! 8)

Hypothetically, such as: If by some strange twist of fate, we do make an economic profit, it will also be siphoned to my brother-in-law who will pass it on to the local officials and the traditional moneylenders who would otherwise break his legs and castrate his firstborn son and mine as well. :-X

http://video.cnbc.com/gallery/?video=3000075505 I think this is what you're referring to. When I listen to this load of BS, first my ears bleed, second I remember why I haven't watched CNBC in a long while. Hey! Let's be fair. Warren did miss Apple. Even worse, he missed AOL too! ;D

Yes. That's a given. I like the statement that share buybacks at or below 110% of book value will be "aggressive" in all but extremely stressed markets, when there might be even better bargains available for purchase for a brief time. This gives long term holders security if they need to cash out. BRK's growth in BV has exceeded the S&P00's increase in market cap, plus dividends paid by companies in the index, by 10.6% since 1966. In recent years this outperformance has dropped to about 6% as BRK has become one of the largest companies in the world. Now, BRK's stock price should increase about as much or more than its book value increases because 110% of EOY 2011 BV is currently only 10% less than the price of the stock. If BV were calculated at the end of February, 2012, the stock's current premium to 110% of BV should be about 5%. If, the S&P500 goes down, BRK's BV should hold steady during a small decline or decline less than half as much in a bear market. If the S&P500 goes up modestly, BRK's increase in BV should equal or exceed that rise. BRK's increase in BV should lag a large rise in the S&P500. How much would one be willing to pay for a 10 year futures contract on the S&P500 that will increase in value conservatively, on average, 5% more per annum than the gain in the index plus dividends paid by the index companies? But wait! There's more! This contract drops in value not at all when the index declines by a small amount, and the value of the contract goes down by no more than half as much as the index if the index takes a dive. Today, this contract can be bought for a premium of only about 5% more than the value of the index, about as much as I expect the contract will outperform the index over 12 months.

susan jacques? i doubt that it is she "rapping at the chamber door". but my quess of your guess is probably wide of the rhyme & left of the alliteration :o WEB does like the gentler sex, and that would be a good guess for the J in the parenthesis. But the letter in the story was hiding in plain sight day after day.

I think it was from Dale Carnegie that he learned to criticize generally and praise specifically. This is kind of an extension of that, it seems. No, I understand that and why he does what he does. He had no choice but to fire Sokol. I just believe he did so much for the company and Berkshire, that you don't simply heave it all away. Buffett should have made mention of what happened, why he made his (or the board`s) decision, and that they obviously had little choice in the decision. As well as indicate that the company still appreciated the years of service Sokol showed. This guy, for all intents and purpose, was the one who was going to run Berkshire when Buffett was gone. You can't just bury him! ``Lose a shred of reputation for the firm, and I will be ruthless``, just doesn`t cut it here. Cheers! I respectfully disagree. That happened early last year, and was fully addressed at the AGM. Time to move on. Cheers! :) By the way, did you notice that their next CEO has been tapped ( with two backups ). He ( or she if it's J. ) is described as being well known to all members of the BOD. I've got my idea about who it is. What's yours? All right I'll play the guess game: Matt Rose (for his youth and breadth of experience) I don't think it will be Ajit since he is too valuable evaluating insurance risk and has less managerial experience than Matt; What is yours? Think of Poe's story, The Purloined Letter. :)