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ValueMaven

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    2016 Letter

    in Berkshire Hathaway

    Posted

    One of my more favorite lines:

     

    'Some years, the gains in underlying earning power we achieve will be minor; very occasionally, the

    cash register will ring loud. Charlie and I have no magic plan to add earnings except to dream big and to be

    prepared mentally and financially to act fast when opportunities present themselves. Every decade or so, dark

    clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s

    imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do'

    2016 Letter

    in Berkshire Hathaway

    Posted

    One notable comment is that the entire investment portfolio is "available for sale". Telegraphing the possibility of a giant purchase, with extended liquidity?

     

    Yes - that was very interesting and odd all at the same.....

     

    ValueMaven

    2016 Letter

    in Berkshire Hathaway

    Posted

    'Last year, as I mentioned earlier, we spent significant sums getting Duracell in shape for the decades ahead' 

     

    What do you think this means?  I have my own thoughts...but would be interested to hear what other shareholders think?!

     

    Sincerely,

    ValueMaven

    2016 Letter

    in Berkshire Hathaway

    Posted

    No mention of 1) Trump 2) Wells Fargo 3) Airlines (outside of saying BRK just bought some 4) APPL....

     

    Brilliant letter in typical Buffett format...

     

    Would also be interested to think what others feel BRK's Book Value is currently....

     

    Sincerely,

    ValueMaven

    Hamblin Watsa investment style over the decades

    in Fairfax Financial

    Posted

    Yes it has - although they will say it hasnt...Of course as Mr. Market changes, one needs to adapt, so I have no issues there.  You're best bet is to read Prem's early investor letters - I would say from the late 80s to mid 90s he was deep almost distressed value.  They made big $$ in natural resources related companies, miners, gold, and banks early on.  Then in late 90s/early 2000s they started to switch to the 'better business' and even wrote that the three stocks he would 'own for ever' would be Wells, J&J and Heinz.  They have since sold these names for huge gains, and are now back in distressed equity since 2009 I would say.  Would love to get other shareholders view

     

    ValueMaven

    What's your current portfolio?

    in General Discussion

    Posted

    My wife and I are both working full time, have no kids, are investing for retirement and roughly living off one income while investing the other. We have quite some time to go, unless we're very lucky with our future returns (though I try to temper my optimism from what looks like an unusually great year).

     

    Tax Free (UK Self Select ISAs):

    Cash (GBP) 3.3%

    BRK.B 61% (37% operating company market value, 24% look-through market value of BRK portfolio)

    AAPL 27% (28% look-through exposure)

    WFC 4.6% (8.5% look-through exposure)

    IBM 1.3% (3.6% look-through exposure)

     

    Taxable but gains/losses well below UK Capital Gains Tax threshold

    HPQ 0.7% (taxable, via employment & divestitures but not yet reinvested)

    HPE 1.1% (taxable, via employment & divestitures but not yet reinvested)

    KEYS 1.5% (taxable, via employment & divestitures but not yet reinvested)

     

    Additionally I have a pension invested in UK FT All Share Tracker which should be worth about one third as much again at present, adding some diversification to allow me to be more aggressive, plus a new pension starting now for my wife and another for me in a few months - again to be invested in cheap trackers.

     

    With my wife included, we hope to be able to invest about an additional 10-15% of today's market value into our retirement funds each year for the next few years (including some in the form of future pensions invested in trackers), so we are not so risk averse as the already retired.

     

    I feel BRK.B is sufficiently high quality and diversified I'd be happy to hold 100% from time to time especially when it seems undervalued. I went heavily into BRK.B (over 90%) in February at about $125, selling HLMA (London) which I felt was pricey. Currently BRK trails HLMA by 1.74% (in GBP) excluding dividends so this looks poor, though I could argue that I sold most of the extra BRK exposure for a 13% profit when I...

     

    ...made a big bet on AAPL at $95.00 when it suffered bad year-on-year comparisons but I felt iPhone 7 and iStore sales would see some recovery, reducing my heavy BRK.B exposure by about one-third at $142.00 to fund most of it, but limited my initial exposure to about 25% due to the single company risks and moderate but real risk of Apple going the way of Nokia (despite customer lock-in, brand cachet and ongoing Apple Store sales). Since then AAPL is up almost 18% versus BRK (excl dividends) as BRK has only gained 2%. My wife doesn't like AAPL and neither of us has any of their products, but I recognise value there for the investor.

     

    We've also added new money to the portfolio this year.

     

    Also I lucked out big-time by being almost entirely USD denominated when the Brexit vote hit, so my portfolio looks like it gained enormously in GBP thanks to my home currency being greatly devalued! So despite the gains, I don't feel anything in my portfolio is overvalued, but I'm prepared that my gains might be wiped out in part if GBP strengthens versus USD.

     

    Do yourself a favor - half that position in BRKB and buy some FAIRFAX!!! 

    What's your current portfolio?

    in General Discussion

    Posted

    Great question!! 

     

    11.11%: Gross's Janus Unconstrained Fund: JUCTX (I think of this as macro w/HY overlay giving me 2-3% in HY ST exposure w/Gross's macro overlay)

    8.64%: PIMCO Total Return: PTTDX

    8.84%: LSB Industries: Special Situation Equity

    9.5% Wells Fargo

     

    62% Cash: Valuation trumps everything...

     

    Sincerely,

    ValueMaven

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