twacowfca

What a great tidbit! :). Buffettesque *** Got any more, Grenville?

Keynes had de facto control over the Kings College endowment for several years while he was its Bursar, according to Walsh. During his stewardship, the value of the endowment increased 12 times while the general market was up less than two times. Walsh quotes Keynes: "The financial concerns where I have had my own way have been uniformly prosperous . . . My difficulties in financial quarters all through have been the difficulty of getting unorthodox advice accepted by others concerned."

Are you commenting on Keynes and the Market by Justyn Walsh? If so, I don't understand how you arrived at your opinion. There are quite a few brief references to Buffett throughout the book and also references to Graham and others, but the book is very much about Keynes. The fact that great investors come to similar conclusions about some of the most important issues reinforces the intrigue of understanding the nuances of their investing styles. My personal preference is Keynes later value investing style: cautious, holding back, but still a plunger when presented with a very deep discount on solid companies. IMO Keynes' insights on the psychology of investing are timeless and far more important than the also valuable recent academic studies. Buffett and Graham also are wise here. But Keynes was especially observant with original insights and profound understanding of the irrational quirks of our nature. :)

The unstated point of my recent post is this: the proper concern of BRK shareholders has been a rational estimation of intrinsic value. During the era of WEB's stewardship, the market has, however, IRRATIONALLY priced BRK at a substantial discount to the inferior avg S&P co. During its glory years BRK was sometimes priced as low as HALF BV! In a few months, when BRK will almost certainly become part of the S&P500, what seemingly rational ( by benchmarking reference ) comparison will Mr. Market use to price BRK ? Will it still sell at a large discount to the avg S&P co? What rational(?) mechanism will Mr. Market use to line up BRK with other large cos in the index? Will it be as a growth Co? It's growth in earnings from it's wholly owned Cos has been phenomenal. Would Mr Market do such a thing for such a large Co? If not by that mechanism, by what? Any ideas?

This take on Keynes investment prowess is superficial. At one point during his speculative period he was insolvent. He was indeed rescued by friends with money, but not mainly because he was from a wealthy class. He had made a lot of profit for his investors earlier, and he was esteemed highly enough to be advanced a little more capital. He soon recouped their losses. His situation was similar to Ben Graham's rescue by the Newman family. :)

It's a great move IMHO. It's not debt, and they can pay the div at no real cost when inflation kicks up in a year or two. However, they may use the proceeds to pay down other debt or pref that costs them more to service.

Kraft may actually get some synergies out of this one if dealraker is correct that Cad. should have been able to have gotten better returns in recent years.

Keynes record was amazing! He was first a successful speculator, mainly in currencies just a few that he understood very well by fundamentals. He wrote a paper on probability that was so well received that he was made a Fellow at Kings College, Cambridge without jumping through the usual hoops. He had a good sense of concepts like what we now call standard deviation. He knew how to wait for the fat pitch, and this saved him from ruin on a couple of occasions. In the late 1920's he repented of his highly leveraged speculations and became a value investor, mainly in equities. His portfolio lost 70% of its market value in the 29-32 market crash, but he slept soundly without margin. At the bottom of the market, he shifted most of his funds to the US market which had tanked much more than the UK. He bought solid, dividend paying utilities at absurdly low prices. These promptly tripled. By the late 1930's, his portfolio was worth thirty times its value at the low point in1932! Sadly, he died of a heart attack just after WWII .

The full price paid for BNI will be carried on the books, even though it represents a multiple-to-book of BNI's underlying assets. In theory, if Berkshire only held KO and nothing else, Berkshire should trade at book value even though KO trades at a huge multiple of book. Excellent point, Eric. The publicly traded Cos that BRK owns are already trading at multiples to book before they are marked to market. On the other hand most of BRK's wholly owned Cos are carried way below any rational private market value which would be way over tangible book. Also the cyclical Cos BRK owns will surely have a greatly increased value as the economy turns up. ( think BNI's sensible scenario of doubling earnings over the next four years) Let's assume that the public Cos that BRK owns are fairly valued compared to the rest of the S&P ( although they are on average superior). Can we assume that the rest of BRK should command a substantial multiple to BRK' carrying value for them if those businesses were part of the S&P? If so what would the increased multiple be?

Keynes and the Market by Justyn Walsh. It's on my personal list of top 10 books on investing. :)

2010, noon. BRK YTD. + 8.8% S&P500 YTD + .5% Jan. 21 Closing the gap. :) ( By the way, the gap is VERY large if you compare BRK's BV to S&P500 BV :) When BRK joins the S&P500 in a few months, is there any good reason why a superior Co like BRK should not sell for a PR/BV multiple that is at least equal to the index?

The idea of destroying the housing oversupply sounds appealing, but is it? By extension of the same logic, should we buy oil when the price is "too low" and use it for a big bonfire to help the economy recover? And perhaps also spend a few hundreds of billions of $$ €€.?? To sequester the CO2 generated to aid the struggling green industries?

Yup. "Swiss Re will reinsure a closed block of yearly renewable term life insurance, written before 2004, with Berkshire Hathaway Life Insurance Corporation of Omaha Nebraska."

It's more than a few years of best results if you include their CEO's record at Lloyds of London before he was tapped to run Lancashire. His first fifteen years of underwriting were nonpareil. Check it out. :)

Shhh. :)

Chubb, HALL, HCC: all excelent Cos. If you have a diversified portfolio, buy 'em all now when the price is low. However, if you like to concentrate, it's hard to do better than the outstanding "Bermuda Re" Cos because they have competitive advantages not enjoyed for the most part by other INS Cos: no Corp. taxes -- this by itself , ceteris paribus, will increase the value of the Bermuda Co enormously over several years, compared to a Co that is subject to taxation. Get your compound interest calculator out and share with the board what the comparison would be over 20 years for a Co with a 20% annual pretax return that was then taxed at 42% state and federal rate VS a twin Co that was not taxed at all! :)

Stuff happens when you acquire a conglomerate. :)

Thanks. See change. :)

The traditional transaction there is the "pawn" of a valuable item where the item becomes collateral for a loan for about half its value. If the loan is repaid within 60 days or so, the item can be redeemed for repayment of the loan plus a fee which is usually small, but actually has a rather high implied annual interest rate. This fee is similar to the break up fee that must be paid in a corporate take out if another buyer takes the prized company away from the first buyer for a higher price.:)

Yes! And the salient feature of their 9% buyback is that most of the shares will be repurchased in Q1. :)

FFH's CDS purchases were brilliant -- not because they worked out well, but for the reason that they greatly increased their margin of safety while they were in place , purchased at bargain prices, offering protection to some degree from possible stress on their counterparties and offering huge, leveraged protection from a credit bubble related market meltdown. I don't think the members of this board realize how dicey things were for FFH only a few years ago: massive reserve increases, a horrible series of hurricanes, SEC investigation, a massive short attack. A market meltdown that zapped their portfolio or serious counterparty default after another Katrina size storm could have been fatal without substantial downside protection. Their choice of using very cheap CDS killed two birds with one stone : protection against a potentially fatal loss of capital and a very levered upside once the credit bubble eventually popped. :)

People go to the conferences mainly to see other people with similar interests. Glenn manages their portfolio. If we all had our mistakes hanging out visibly for all to see, would we honestly look any better?