twacowfca

smw397 The easy solution to your problem would seem to be to switch to a full service broker with a registered representative who could facilitate what you need. On line discount brokers are not good at handling special needs.

Going for the "Davis Double", evidently.

The SEC restriction on not allowing options trading on foreign stocks would seem to be well founded for writing puts or calls because the basis risk of the value of the underlying issue would be problematic. Likewise for buying puts or calls only if margin is allowed on these values. However, buying puts or calls on foreign exchanges would seem to present no problem for cash accounts in theory. Is this allowed for those accounts that are designated as sophisticated investors, in contrast to ordinary investors who might be sold worthless foreign securities by an unscrupulous broker. Does anyone have more info onthis?

Gaf63. What do you mean that you didn't recover the full amount? If Canada withhehd 15% and the US tax on dividends is 15%, then it seems that you should have gotten a credit of 15%. What did you actually get?

Eric, are those bankers related to the people who wouldn't sell you a health insurance policy? Why don't you come clean and tell us the truth about your background?:) Seriously, try a small bank that's in decent shape. A great uncle had a very small bank that was one of only three in the US that was sound enough to be permitted to reopen the very day after Roosevelt's banking holiday ended in the 1930's. His secret? They said he wouldn't make a loan unless you could prove you didn't need one! He lived to be 101 and ran the bank until just before he died. If he were still alive, he would lend you money.

This is a sad occasion for me. I loved the short attacks that are now very likely gone with the wind. No more opportunities to buy FFH way below BV. No more getting paid 11%-13% per annum for renting out my shares. So sad. Too bad. :-[

Eric, we have a large holding with Fidelity that's traded on the LSE. When this was a regular account, we were told it wasn't marginable, but now that we are dealing through their institutional desk, they are crediting us with margin, although they did not notify us about their change in policy. We almost never use margin, so our attitude has been: don't ask, don't tell. Evidently, these brokers have different standards for larger accounts.

Chairman, Schmairman. What's in a name? When Harry Truman became President, he said, "The buck stops here!"

Charlie Munger says (only a little bit tongue in cheek IMHO) that Bill Gates should be BRK's chief investment officer (as a humorous comment about Gates spotting the change in railroads' ROC before Buffett did. Could this not be a Freudian slip? Who better than Gates, BRK's future to be largest shareholder?

Once a railroad locks in a shipper to an efficient, long distance unitized train system, it's almost impossible for a trucking co to compete and take business away from a railroad, even if fuel costs drop. Think about It. Hundreds of truck drivers on the road for two days and nights from the west coast to the Midwest with operating maintenance on hundreds of tractors vs a small crew for a nonstop train trip with operating maintenance on perhaps four very durable locamotives.

The history of railroads’ ROA has been , unfortunately, rather like airlines’: LOUSY! The first railroads often had extremely high, positive cash flows soon after new lines opened, but most of this was soon needed for maintenance capex. Penn Central went bankrupt in the 1970’s after it had been skimping on maintenance capex for decades. Even the sainted Benjamin Graham with all his experience looking at railroads’ balance sheets was blindsided by their descent that was quicker than Enron’s. What Gates and Buffett have noticed in recent years is that the worm has turned And that especially the western railroads don’t require nearly as much maintenance Capex as they used to. They don’t need nearly as much right of way to service their core routes as formerly and that frees real estate for potential , more profitable development in the years ahead, without nasty ongoing costs. This is a nice Little bit of lagniappe that comes with the main course of steadily increasing profitability.

Rszutu604 I'm not expert on regulatory pricing issues for railroads, but I think that rate control is now generally left to the marketplace. Does anyone have more detail on this? Regardless, their current ROA is rather low, and appears to allow much room for higher returns.

Another good point that Bruce makes about under depreciation is actually a potential advantage for BRK. Here's an analogy: BRK buys an INS co and soon discovers that they are under reserved. BRK increases reserves. Result: GAAP earnings go down, but cash goes up because there's no tax on the extra float as there would be if they called the extra float: "earnings".

What Bruce identifies as the big negative in the BNI purchase is actually the HUGE positive now that BNI is wholly owned by BRK. It's true that BNI has not come close to exploiting its pricing power. It's not rocket science to come up with a plan to fix this. If this is too hard for anyone to grasp, go back in time and see what WEB and Charlie did after they bought Sees. :)

BNI's ROA doesn't look that great, but BRK's doesn't either. WEB doesn't care much about GAAP earnings. He likes things where potential earnings can just as well show up as conservatively reserved float instead. BNI is like this too. Their FCF going forward should be a lot more than GAAP earnings and increasing at double digits in 2010 and beyond.

Oh, Sanj, one more thing: In a few years, when the real estate cycle turns up, BNI's land holdings will almost certainly be worth considerably more than BRK paid for the whole co: a very nice "problem" for Warren's successor to have to worry about. :)

Sanj, I strongly disagree with your take on BNI. BNI is a toll road, an ideal business. It's routes are almost entirely across the vast American West where trucks have the greatest disadvantage competing with railroads,unlike the East where population centers are close together and the fuel and labor cost savings of railroads is largely negated by the flexibility of trucking. BNI's pricing power is illustrated by their ability to pass on fuel price increases without having to cut rates when fuel costs decline. Their forward capex will be relatively low. They can lay extra track on existing right of way at relatively low expense if needed, and shippers can be required to provide their own cars. In short, it's a much better business than almost any other that is based on hard assets.

Here's how a bubble begins. Stage 1: Opinion is diverse. Stage 2: Opinion shifts toward near unanimity that something very good is going to happen in the future in a particular aspect that seems without limit. Stage 3: Herding behavior takes over from rationality, and the herd tramples contrarians as self reinforcement causes momentum to build. Stage 3: Rational agents sit on the sideline as the momentum of the herd builds, but some rational agents rationally decide to join the party. The pool of rational agents outside the party becomes smaller. Stage 4: The bubble inflates exponentially. Stage 5: Smaller bubbles appear around the bigger bubble. Stage 6: the rate of inflation accelerates, and approaches the limit which may be a probabalistic singularity rather than an absolute limit. THE BUBBLE POPS

Sanj, why do you say that Burlington will suck up BRK's cash for the next 50 to 100 years?

I'm greatly offended! At 9-0 the colts are deffinitely a bubble stock. :)

This looks like a good idea, or is it? It's even more important to also track the intrinsic value of the held and sold positions going forward. If the general performance of the board is like mine, this is probably what you'll see: Many positions are entered a little too soon (some way to soon), measured by price performance. Some positions are exited just right, but others are exited too early as judged by Mr. Market. Occasionally, you'll have a long term hold that just keeps compounding because Mr. Market ignores it. This is where IV comes in. If you don't have a good handle on IV, you've made a mistake with a company no matter what the price performance is, or you're just fooling yourself that you're a value investor. IV is the moral compass to hold you on course while the winds of fashion blow. Then, after a few years through the end of the latest fad or cycle, a better picture will emerge revealing if your estimation of IV was a truer heading than Mr. Markets'.

Sorry for the misunderstanding. I need t' bone up on what's a joke. :)

Tbone1 previously said he didn't have the guts to buy WFC at single digits and that for all he knows they're insolvent. Ergo no cigar. IMHO this board has better things to do than to try to guess and "out" people.

Well said SharperD. Anyone know why they delisted?

Oops, inflationary and deflationary.