buffetteer1984

I can see fund managers unloading their positions in berkshire after this. Buffett repurchased shares in the 220s but completely stopped as the shares have languished sub 200. He sold airlines but didn't redeploy that capital. Now cash pile is more than 25% of market cap. I don't see a reason for not at least dabbling daily in just repurchasing shares. He's behaving like most CEOs people crucify for buying back shares ie when prices are high but not when they're lower.

He also mentioned during the interview that an 8% difference from the time he published the memo has turned him relatively bullish to now more cautious. This doesn't exactly scream someone with a long term perspective.

Completely agree with this. Too many media pundits are quick to state average p/e during times of stress was xyz therefore now it should be the same. Value is a moving variable by retained earnings but also interest rates. At no time in the past has rates ever been this low for this long with the amount of stimulus being pumped into the markets. Another variable people seem to forget is the companies that constitute the markets. In 2008, 25% were financials, and ALL their earnings for financials went to zero most took forever to recover those earnings ergo the stocks lagged. If we look at the nov lows and then the march lows in 2008/09, the nasdaq never made a new low simply cause people realized the tech companies would survive. S&P got dragged down further due to the banks. Now, 25% is basically in the fang stocks and all those companies have no issue getting through this time and will likely thrive post pandemic just on survival of the fittest. So unless people think the fang companies will have a permanent impairment of 50% on their earnings it doesn't make sense for markets to go down 50% and that markets are rising

I completely agree with this. Berkshires value has long been disconnected from buffetts ability to pick good companies. Berkshire is relying on the growth of the economy at this point. Nobody said Berkshire isn't a great company. But even FB is a great company and it compounds value but do we attribute that to Mark Zuckerberg doing any stock picking? It basically runs itself. The question is what is he doing with excess cash flows? What has buffett actually done in the past decade? Made his famous bathtub 5 bil preferred in BAC and GS, then he botched a big bet on IBM, then the KHC debacle, then the purchase of PCP which hasnt' been that great, and then the mess that is airlines, great bet on AAPL and then Oxy. If any of the investors that were listed made these bets in an overall portfolio would we not be questioning them? You think berkshire is compounding value at this point based on buffett? It's more the operational managers that are compounding value. Buffet has been riding the waves of the economy and the cash flows of the companies he purchased in the past. What we on this board are concerned with is ultimately picking stocks. Maybe buffett just isn't that great of an investor in this new environment where innovation is dominating markets. Haha. I'll let you know if he calls 8) Charlie's just bummed they sat on their hands too much and the market is back up. He's trying to talk some sense into it! FWIW, I do agree with him, but Re: berkshire, they should have been paying a dividend, doing buybacks, or buying more of the big tech cos than they are. For years. I'll take Facebook and Amazon specifically to outperform BRK.B massively over the next 20 years to the point that it's comedic anyone considered it an open question. For BRK owners... if you think of yourself as a long term investor, why do you own a business whose calling card is a pair of 90 year old experts in 20th century businesses? Amazon and FAAGM generally have plenty of smart operators who have studied Buffett, understand the 21st century economy and businesses, have better data, better opportunities to invest capital, benefit from technology, and have all shown it by growing faster than BRK the last 10 years. What's the advantage of BRK the business at this point? 1-5 years of Warren Buffett and staff picking a basket of bank stocks and SPY for you, and a random conglomerate with low synergies or integration, pays no dividend, has upcoming governance/brand risk? Okay, that's pretty un-nuanced bordering on dumb devil's advocate take, but basically, I have a hard time disagreeing with myself about too much of it. I do own BRK, and trade in and out of it occasionally. You can tell when it's a good time to sell because it never goes above $225 a share :P

I agree, i've definitely jumped the gun on making any assumptions on what berkshire has or has not done. My caveat is more when this is all said and done and they're still just sitting there with 125 billion saying they couldn't find opportunities, I would be annoyed as a shareholder. Now if some are right and the economy completely blows up, honestly I wouldn't want to be holding ANYTHING not even berkshire. If we think this will ultimately pass, then we shouldn't be trying to time anything, especially after a decline of 35-40%. What's the worse that can happen beyond that? Another 10%? Which is why I bring up that many others are seeing "value" even if berkshire themselves are not publicly stating so. I think that was the main point of discussion with mungers article and his conservative take on the record. Afterall, we're all trying to make the best investment decisions here. I'm sure if warren came out tomorrow and said listen this is a generational buy, we'd all feel alittle better. But because he isn't, we're more cautious, while there are investors that are just as "savy" taking action, which is the point of the names I brought up.

Miller's hedge fund was up 100% last year. Unless he's been trailing the s&p by a wide margin over the past decade, which he hasn't, I think that one year like that more than adds value vs berkshire which has not beaten the s&p at any point, not even during this pandemic and they're sitting on 20% cash. Yeah I agree berkshire is different but not entirely. They still hold half their market cap in liquid equities. They can buy and sell whatever (example airlines). So you're sitting there with 125 bil waiting for an elephant (whole business) but it never presents itself while you hold on to equities that you bought at higher prices (since 2016) and watch the price go down why not at least add to the marketable securities? A few percent maybe? If he was down to his 20 bil threshold i can understand conserving cash for operation purposes but 125 bil? And do nothing? This pandemic presents more opportunities because there are companies earning power that will not be permanently damaged. Google's value today is likely more appealing than in the past just simply cause their earning power isn't impaired yet the price is reflecting it would be. Not every company will face a doomsday scenario. There's a reason the nasdaq is barely down this year. It constitutes 5 of the strongest companies where the long term intrinsic value is barely hurt from even a years of lost earnings.

So the question is, should we continue to look to warren buffet or charlie munger for indications on what to do in markets or is energy better focused on others like his disciples. Ackman, tepper, hohn, klarman, miller have all said stocks are incredibly cheap and are buying. Most of these guys have also outperformed berkshire over the past decade.

It shouldn't happen to the two guys that have always preached to buy and hold and buy when others are fearful..unless they're buying quietly. If they're sitting on their hands again (they also didn't do anything at the end of 2018) shareholders should be furious that they were willing to buy for years as markets rose but not now and are sitting on ample cash. What's the point of preserving all that cash if you don't use it when asset prices go down a whole lot? yet it happens Every market correction...

I find it hard to believe that buffett and munger who have been buying stocks ever since the great financial crisis and advocated that the s&p is cheap if rates stay low would suddenly stop buying when markets go down 40% and people declare "we're in a bear market". Bear markets end at some point. Bear markets also don't force markets to go to zero. So if berkshire is not willing to buy after a 40% draw down, when are they willing to buy? Also considering theyve been buying since 2016 and most of those purchases are now ALL in the red. Graham’s definition of investing starts with ‘safety of principal...’. Buffet’s first rule of investing is: don’t lose what have. Rule 2 is don’t forget the first rule. Bear markets are all about capital preservation. This is what I feel is being manipulated by the so called "pundits". This recession is very much a gov't mandated one, which is also why they're more than willing to provide ample stimulus to bridge companies through the pain that THEY'RE forcing upon them. It's almost lilke a company is writing down a quarter of their earnings but it's a one time write down.

At every point over the last decade buffett has said if rates stay low he'd be buying the s&p all day long. So this virus comes along and we're in a temporary shut down and we suddenly think he changes his tune? Or Munger? If berkshire can't buy when the market draws down close to 40% while their holdings (especially banks) are getting whack by 50% what's the point in even holding his positions? He might as well go 100% cash. He must think it recovers at some point. If he believes that is he willing to just take a round trip and do nothing when he's sitting on 20% cash of market cap and wait for sunny days to start deploying it? Seems counter to everything these guys have ever preached.

I agree I think alot of people think we need to get cases to zero before we open the economy again. That wasn't the point of this lockdown. It was to limit the deaths (but not prevent it entirely) by not overwhelming hospitals. In terms of mask, Dr Fauci originally stated masks weren't required but I believe he came around to suggesting it as an effective way of preventing transmission. Originally I think the shortage of supplies for front line workers was the agenda behind the message of the masks effectiveness. That may still be the case which is why they suggest most to wear scarfs, or some form of clothing around your mouth area instead of directly suggesting masks for the general public. I think that this is an extremely good point that has gotten lost over the past month or two. The goal is to avoid overwhelming the healthcare system, not to eliminate every potential death from the virus by remaining shut for a year. (Based on Canadian polling, it's pretty clear that Canadians in aggregate don't get it.) On the "how to reopen" list, it shocks me that they aren't bothering to require masks, since it seems to be a cheap and easy solution to reduce transmission (and deaths and medical costs). I wonder if there was some reasoning behind that, or if they were just writing down stuff on autopilot, and not really thinking. If they decided not to include it for cultural reasons, that puts the US at a competitive disadvantage relative to other countries that are more open-minded about such things.

I think human nature is wanting to be around others whether it's eating out or going to the movies or any social gathering. People are already violating the lockdown rules because of cabin fever. I'm from Toronto and there's a $1000 fine for violating social distancing. The fact that such a huge penalty has to be implemented to prevent people from doing it implies we're desperate for it. If the all clear sign is given i think economy rebounds and then some with all the stimulus. The more important question is how people deal with the slow roll out of getting back to things.

Sure in a normal environment if a top was called on a the stock and dropped 50% kudos to anybody that makes a call of that nature. But this period has exaggerated every move to the downside in the market. My point is you could call tops on anything you've sold prior to the down draft and you'd look like a genius. Now to the degree of the drop did you expect it or was it luck? Because i'm sure if fnmas had only dropped 5/10% nobody would be speaking of this "top". You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism. I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork. Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong. I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore. muscleman your call from 2019 was epic. no one can deny that. going forward please contribute additional calls with any color on your TA work for FnF and don't look back. There's a good chance your return in that capacity would be appreciated by most or all here. No one? you sure? It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd. He's basically claiming he called the pandemic. Correct, I would note too that he didn't tell us to buy last week which is a strike against also ;D I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too, so now I get it. Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison. To be fair, it's not as if he called that the stock would go down. He called the top of an idiosyncratic investment, which topped several months before the top in the overall market. Luck or skill? I can't say, but he certainly did more than what you're implying.

Anyone willing to risk hard earn money based on drawings is a fool. He didn't forecast anything. You could make the same claim to any stock on this planet and they'd all be down. If he "saw" it he would've shorted everything. It's not like he was smart enough like an ackman to actually make money on his "predictions". You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism. I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork. Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong. I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore. muscleman your call from 2019 was epic. no one can deny that. going forward please contribute additional calls with any color on your TA work for FnF and don't look back. There's a good chance your return in that capacity would be appreciated by most or all here. No one? you sure? It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd. He's basically claiming he called the pandemic. Correct, I would note too that he didn't tell us to buy last week which is a strike against also ;D I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too, so now I get it. Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison.

Maybe Warren learned his lesson not to speak too soon, for better or worse. One other difference is how swift this down draft has been. It could be possible Warren needs more time to buy and will speak out when he's done or certain his elephant isn't available. In 2008 he spoke out after he had already made the big purchase. I think he is buying. With that said, he did tell the world that he was buying in Oct 2008...in which the market drop another 20%+ after.

How do people know Warren isn't accumulating at the moment? Just because hes selling airlines doesn't mean he can't be a net buyer overall in stocks he probably views as being able to weather this environment much better ie banks possibly. He's not gonna come out and tell the world it's a good time to buy and have the markets take off on him when he can only buy a certain amount every day. For most people if you weren't buying when the markets fell to 2200 on your own you have no business buying at 2700 just because buffett gives you his blessing. He gives his advice annually and that should be sufficient enough to make our own decisions. We shouldn't need him to go on air everytime there's some panic so he can calm us down. The thing with berkshire is they're not looking to buy and sell stocks. They're looking to acquire companies to increase cash flow. It's one thing to buy apple and collect 1% in dividends and another to get the entire company and decide what to do with all the cash flow. He's holding cash for that purpose. I'm sure if he didn't have to pay a premium for an entire company he would have bought something already. That's not the case for berkshire. So they pick away at stocks while waiting for the elephant

He did mention he wanted to have the cash in case the deal in 2018 worked. Buffett doesn't seem like the type to go 100% in. He'll always keep cash on hand so given his minimum of 10-20 billion cash reserves he'd be comfortable with unless the markets collapse 50% he'll likely just be buying incrementally again and waiting to bag an entire company when the opportunity presents itself. I can see him just buying more of apple and jpm and nothing else.

When Berkshire was headed to 200 everyone said it was a buy and now it's dipped into 170s and people say it could get worse. What if it doesn't? And who really knows. If you wanted to buy a house and it drops 50% and you wait for that potential 10% further drop you're just trying to time the markets. How many times in our history has the markets drawn down 30% from the peaks?

Why not just buy berkshire hathaway and call it a day

Like clockwork, when FNMAS is going down, MM post about his abilities...

I agree his price target is meaningless. The more meaningful point to make is he's close friends with bill ackman who reportedly got tilson interested in the investment. Not that following a hedge fund is smart idea but ackman is well connected and has spoke with congress about the gses. Not to be a debbie downer (I am bullish on preferred), but I don't think his reported price is so meaningful since it is unclear what his assumptions are and the time frame he sees. As we continue to move down the road of R&R it is clear that the range of outcomes is beginning to narrow, however, without capital rule, other FHFA adjustments to F&F's business, settlement, and understanding of TRSY plan on Warrants, IMO we still have a pretty wide band of potential outcomes on what to value common.

Whitney Tilson believes commons are worth 18.50/share https://finance.yahoo.com/news/fannie-mae-warren-happened-robin-152059474.html

anybody that has bought on pullbacks over time have done relatively well. This isn't a short term trade people should try to game based on charts just see MM buy high and sell low strategy (the stock is up 100% for the year!). +2 I have an exactly opposite view than most of you here. I had a tight stop and was stopped out of my big 20% position last Thursday and since then I've been flat. I was gonna post this yesterday but was too busy. I think a major top is right here. $14 is the key resistance for FMCKJ. The market reaction has never been worse. A positive court ruling only caused a false break out. Then this Monday's 20bn capital retaining news only caused a big volume down day, followed by another big volume down day yesterday. If you look at the daily chart since the positive court ruling and count how many down days you get vs the up days, and the volume on the only 3 up days, you'll see how little buying there was. This is the one of the few classic topping actions. I don't see any reason to continue holding this stock. It will either go flat or go down. This will be my last TA post here. I don't like being taunted over and over by lots of you. Thanks! Bye Felicia!

or maybe they were spreading lies to cause price declines to buy in this whole time 8) more on this NOW with @LizClaman as @USTreasury eyes Sept-Oct time frame to release long-awaited memo on reforming GSEs. @WhiteHouse will provide comments in coming days before Treasury finalizes $FNMA $FMCC Treasury had no comment on matter Must be another big player spreading rumors to unload. :o

@MM you seem to be basing your opinion on information arbitrage and because information is readily available and share price is going down it somehow implies that there's info that maybe WE don't know. This could simply be market irrationality which is a basic concept. Stock prices don't always go up and when it goes down it doesn't automatically mean something is bad or we don't know something. Could it not be that people aren't willing to invest until the concrete plans are public? I'm sure investors are watching and not front running the position willing to miss out on some upside to ensure certainty that the plan will come out and will be what is assumed. Market prices don't always make sense i'm sure most of us can agree on that for any positions we own.