DooDiligence

This is my thought as well. They already have a cash problem. Why add to it? I disagree for two reasons: First, I don't think this is a good reason to own an overvalued security. Assuming of course WB thinks Apple is overvalued. Secondly, I don't think they have a cash problem. Having loads of cash isn't a problem, the problem is WB did not use it a few months ago. So if you think they should hold Apple today, then you must also think WB made an error in Mar-Apr not diving into equities head first. I agree with LC. Needing cash (or not needing cash) isn't a good reason to make buy or sell decisions. Imagine running your own portfolio that way. I know multiple people who took cash out of 401Ks during the Great Recession because they lost their jobs and needed cash. This kind of thing is the polar opposite of value investing. The fact that arguments like this about Berkshire (shouldn't sell possibility overvalued positions because marginal value of additional cash is low given how overcapitalized and cash generative the company is) make some intuitive sense speaks to Berkshire's size being an issue. There are three connected issues really: - Selling appreciated stock in taxable account is always a high hurdle, since any alternative (cash or other position) would have to outperform taking into account tax hit - This is further aggravated by existing and increasing cash position - This is further aggravated by very limited universe of investment options due to the size I think all those points hit on why AAPL position, assuming the stock is fairly valued* at the current price, should be valued at a significant discount to market price. * I recognize that this is a big assumption, but this discussion is probably better off not veering into "where should AAPL trade?" I think it should trade straight out of the portfolio unless he's trying to engineer a purchase of the whole business (not likely...) Pigs get fat... Sell & pay the taxes before you get slaughtered with another period of analysts screeching "peak iPhone" again.

Munger’s shoes are almost impossible to fill I think. It’s hard to imagine the annual meetings continue in the same fashion that it has for 40 years. But we have archives . Future questions are likely to be repeat from the past. I was thinking in terms of how many bad decisions he's kept WEB from making by being the devils advocate. I'll bet he had a few choice barbs about airlines which didn't stop the purchases but may have helped create the about face. The flip side of this might be that he cast a shade on opportunities last March. I hope (for better & for worse) there will always be a curmudgeon involved in allocation issues.

I was trying to find info on businesses that BRK may be closing or selling & came across this. “Technological change is destroying daily newspapers in America including the little ones like ours,” Mr Munger told Daily Journal investors. “The revenue goes away and the expenses remain and they’re all dying. Berkshire owns about 100 of them and it doesn’t matter because they’re all going to die. There’s nothing that can be done.” “Think how different television is, [Walter] Cronkite is gone. We have all these clowns on the opinion service lying to us . . . and they’re really good at it,” he added. “The ability to mislead people is greatly underestimated.” www.ft.com/content/03f977e6-4dde-11ea-95a0-43d18ec715f5 --- Between Jain, Able, Todd & Ted, who do you think would best model Munger?

Ah, Thanks. I've never been to the FL Keys. I've got to get down there someday. Yea, everything down there is referenced by mile marker since the entire collection of islands is only accessible via one road, which is US-1. oh man your description of the Keys sounds legit, never even considered it previously :D Nice place to visit but the whole one road in, one road out thing is rough during hurricane season. + High humidity, all year round, invites wood rot. Wood boring insects are a plague in the Keys. Salty air tends to eat up metal, think aluminum in particular (brutal on A/C units). Hard water is lousy to bath in. That said, Duval street is a ton of fun. Hog Fish Grill is a Keys dining experience. 5 Brothers Grocery makes a kick ass Cuban. No Name Pub on Big Pine is a great hang, and there's tons of beautiful, out of the way spots up & down the keys. Why own when you can kick around the Keys & the entire world for that matter, with no obligation other than enjoyment. I 2nd gfp's idea that if you find yourself visiting a particular place & making solid friends there, think about buying. I've been selling a lot of my stuff over the past year & am likely to stab a sign in front of my house & hit the road before too long. Might sell if the price is right & might just rent until the price gets right, but I want to become like water & find the path that leads me.

I think it's an Easter egg & that some time over the next few decades, pieces & parts will be spun. I just can't see how the SOTP is not worth significantly more than TBV. Then again, WTF do I know?

Oh my, this is interesting, thanks!

That's interesting but intricacies of property-casualty insurers' federal taxation are not exactly the topic of the day. :) Looking at many reserves triangles over the years, it seems like there is a trend. Rarely, insurers use big-bath accounting techniques and sometimes (to varying degrees, from benign to improper) insurers use the reserves account as a "supplemental" cookie jar to mitigate underwriting results (in both directions). However, usually, there seems to be consistency for companies to maintain a relatively constant pattern of either under- or over-reserving. Why is that? IMO, companies (including BRK) that tend to consistently over-reserve do so in the spirit of financial conservatism: to maintain a margin of safety in order to be ready to mitigate potential unexpected future adverse loss development. This posture has the interesting side effect of decreasing taxes paid and increasing cashflow but i don't think that's a loophole Mr. Buffett is trying to "exploit" directly. As far as the federal tax aspect is concerned (whatever the motive), over-reserving has the potential to be particularly significant in growing and long-tail lines (the temporary difference will tend to become permanent) although the IRS requires discounting of future reserves according to prescribed rates (adjusted with the 2017 Act) and established payment patterns. The IRS has slowed down in this area (please educate me if aware of recent cases) but it has been known to go after insurers that tried to escape tax (IRS perspective) when loss estimates of prior years retrospectively became apparently disconnected from reality (owned taxes to be paid with interest and with potential penalty). Despite an industry-wide impressive reserve release record (seems to be coming to an end) in the last few years, it seems like the IRS has stayed quiet (maybe because P+C insurers have not tended to be very profitable in this ultra-super-low rate environment and the IRS budget seems to be under pressure). It seems to me the IRS would hesitate to go after BRK for an over-reserving issue and Mr. Buffett likely would prefer not be tied to a potential tax-evasion issue. At times and in selected cases, it appears that some insurers will significantly increase reserves in some lines in order to secure a premium price increase through state regulators but most regulators are not dumb and this is not BRK's style. To paraphrase; just because a mouse lives in a cookie jar doesn't make it a cookie. www.foley.com/en/insights/publications/2013/09/us-tax-court-upholds-pc-insurers-full-reported-los

Buffetts style appeals to my sense of frugality. Notably, a person can be frugal without being cheap. His lifestyle & charitable donations clearly illustrate the difference. The stock looks cheap but I think it's really just being frugal. There's a certain kind of karmic effect here that I believe gets rewarded over a lifetime. HODL on!

I wish he'd sell out of Apple. That plus the cash pile would make a nice downpayment on Greenland.

I think WEB just likes picking stocks, but unfortunately not enough to have taken advantage of last March.

You have my vote. Now, I am not on the Nobel committee, so my vote doesn't count. Alas! you say, hopes have been dashed. But not so soon! You see, all those on the committee do, in fact, vote. And as we have already established that I too vote, it can be shown that I am therefore on the committee. So, congratulations. I think therefor I am, and I do so like green eggs & ham.

Can you explain this a bit. I kind of have a sense of what you mean. Still love that WWE video that you did a few years ago in which you explain the genius of Vince going over the top. This? Good to see you again TBD.

Rings true & makes me think about BRK.

Yes. You succinctly captured the American spirit of individuality. As an outsider I had never realized it quite as starkly before this virus revealed it. A huge swath of us should not be tarred with the same brush. It's mostly folks who've bought in to the nonsense that gets fed to them by mass media talking heads & political demagogues These same people will bad mouth youngsters & minorities / foreigners for being rebellious non-conformists & yet fail to recognize the same ignorant behavior in themselves.

Searching for Truth in the Age of Misinformation www.pbs.org/show/fake-searching-truth-age-misinformation/

Petronius: "You will be worthy of the spectacle, as the spectacle is worthy of you." Nero: "You encourage me Petronius" ... Nero: "Is it possible that human beings can produce such a sound?" Petronius: "Yes, when they've been driven too far."

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section. https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards. Buzz, buzz... ;D

I've been avoiding the corona thread for the same reason I avoid Twitter (I've not been on Twitter in 6 months or so because it's the corona thread magnified 100 times), but every now & then I take a peek & it's usually the same old garbage from the same old noisy can. What I read today in just a few posts was so incredibly ignorant that it triggered me into a reaction. The man makes inflammatory posts which are dripping with condescending sarcasm & when anyone responds (anyone is frequently the eminently intelligent & thoughtful Liberty) the troll retaliates in the fashion of a Roy Cohn or a Trump. In this case the troll accused me of fomenting a distracting & boorish non-financial environment here when he himself provides significantly more towards distracting people from intelligent conversation. He gets a pass? I'll exercise more restraint going forward. edit: I apologize to you for my corona post but I would never apologize to the troll.

You shouldn't be so hard on yourself, troll away.

I think you're misreading the situation. I think Trump's problems are self-inflicted. If he was a little smart and a little competent and had a little empathy, and was surrounded by people like that too, he'd have done what almost every single country has done and this crisis would've boosted his popularity and been a clear re-election calling card, as most successfully met challenges are for presidents (9/11 for Bush, for example). I protected you, this really bad thing happened and I dealt with it well, you can trust me to have your back for 4 more years, etc. Instead, it revealed him without a shadow of a doubt to be an incompetent bullshit artist who has no idea how to do the actual job, and polls reflect that. As for the market, it's always going to do what it's going to do. People think it should work in lockstep with the underlying economy, but if you look at the facts, it rarely does, too many factors and reflexive feedback mechanisms. If it did, it would be a lot easier to predict, because the economy moves a lot slower than the market.. While this is true, contrary to the beloved narrative some here like to peddle, I really could care less about whether Trump handled things in a way that best suited his political ambitions. In fact, theres probably a greater source of truth to the argument that without some degree of mismanagement, we wouldn't have the stimulus and rate policies that are making certain long and short term investments available and extremely compelling, not to mention predictable, right now. Short term, you have capital markets completely open at outrageous rates to companies just recently believed to be on the brink of "extinction"...longer term, you have guaranteed low rates and a put option of a party change which has already committed to an outrageous level of money printing, and yet inflation protected assets in irreplaceable locations trading at historic spreads against treasuries.... Make piss out of lemons much?

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section. https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

https://wvmetronews.com/2020/07/14/senators-hope-berkshire-hathaway-invests-in-west-virginia-natural-gas-projects/

Episodes 2 & 3 are excellent as well. Watching the way Einstein struggled, largely because of his rebellious nature, is inspirational. Sometimes unconventional thought produces great things. If you have ideas, you should pursue them regardless of what the so called experts say.

I did this by associating fantastic gains from the purchase & sale of LEAP Calls on EW around 2013. The gains were further extended by purchasing the equity at the same time. A gift that keeps on giving. I tried to replicate this with Altria with abysmal results. I still own the Jan 2021 $50 Calls & expect to book a loss on those. I got lucky with EW & don't believe I'll try this again. --- This concept may also apply to shallow impressions of people.

The subscription fee is only for those that want the upgraded services above and beyond the message board. Otherwise, they would have full access and use of the message board as they do now. So nothing would change for the majority of users or new users. Cheers! Good that subscription is actually a "freemium" model and doesn't deter more voices from being on the board. Sanjeev, you've done a great job with this Board and I've often wondered about the "why" behind all the effort spent. If one can align incentives for participants and for organizers, there will be a path forward. Monetizing it means it will be sustainable. Otherwise, volunteer efforts whither away and quality decreases. It seems to me that there are basically 2 populations on CoBF. The wholesale segment generates actionable intelligence which can be monetized in the markets & the retail segment which gets monetized in a more superficial way on the front end. If I were Sanjeev, I'd be primarily motivated to generate information & deal flow from the more productive members of the site. Any walls (pay or otherwise) should be implemented simply to segment the population & any pennies made on the front end can be used to offset the costs of running the site. I would most definitely be categorized as a part of the retail population & would be placed outside the walls unless I'm willing to pony up & be subject to strict posting requirements. This fact doesn't offend me in the least as long as I can still lurk around & improve my thought processes & occasionally coattail a good idea. Feel free to monetize me however possible. I'd definitely buy a cool t-shirt!