rolling

You are double counting geico cash and investments. Cheap, but not that cheap.

My worst year relative to the benchmark was the year after my kid was born. I was stupid enough not to realize EITHER: 1) how much less time I was giving to important decisions, and 2) how poor my mental state and focus were when making decisions. I was like a drunk who doesn't know he can't drive. That one year negated several years of outperformance and just about capitulated me onto the indexing path. 1) Paarslaars: hope things go well with your kid 2) while this has been the 1st year as a dad (and in the last months the addition of a second pregnancy over here significatively increased my share of the "burden", for bad but also for good ;D ;D ) and results have been quite a lot under previous years, I wouldn't feel ok with such attribution. 3) HOWEVER, I added very few totally new positions, and most of these were held for short periods. As such, I don't think this is long term sustainable: I have been mostly capitalizing previous efforts and only value trading previously researched stocks (while trying to remain up to date with them). That feels safe to me and I believe will end up giving me more than acceptable returns, but I am certainly fishing on a much smaller pound as a result.

Returns are hard to quantify: had two big withdrawals that luckily happened when the portfolio was doing well. If I assume those withdrawals weren't there at the beggining of the year (and forget the leverage it offered), return was about 6,4% (it was actually 11% because someone manipulated the year end quote of my biggest holding). So: 2ndhalf 2011 and 2012: 20% 2013: 30% 2014: 50% 2015: less 5% 2016: 50% 2017: 160-170% 2018: 6% (adjusted downwards for the leverage and for the quote manipulation... Must do the opposite adjustment next year, otherwise I'll have to take the dishonest 11%) Results before taxes but after all other costs. Since my core holdings are now much cheaper than they were before, i actually feel much richer than I was, since I now have more upside and less downside on those holdings. Edit: returns in euro

Could you please explain better this point? I am portuguese and never heard anything of it (as far as I know Lisbon real estate is in a quite bubbly territory). Didn't understand also the irish part: maybe there is some irony in your post I didn't catch? Thank you

Merry christmas to all. I wish you all a few more general markets down days for you to load up and a quick recovery!

While there might be little restrictions to the use of float, the truth is that for decades (up until recently) Berkshire has kept an amount of cash available+fixed income above or very similar to the float. As such, float has, for years, offered almost no leverage at all and, at most, offered optionality. When asked about it in this year annual report Warren said "I had never thought about it that way" (I couldn't believe it when I read the transcript, it has become progressively more obvious). But unless he changed that since then (and he might have, he is a learning machine and truth be told, he has been very agressive in the market since then), we should not expect more than a minor return on float. question 17, afternoon session, for those interested

Thank you! It was getting really annoying.

Well, that blog post was a whole lot of nothing. If I understand correctly in part of the article her main point is that his investment in BAC was only an opportunity for him get more fame and that he wasn't acting as a good fiduciary... 7 years later it's more than a quadruple (and we are in a downturn)...

It would be interesting to read what she said. However, After reading half of the 2011 article, I couldn't finish reading, since she seemed biased and wasn't comparing apples with apples. However, it is almost certain that some subsidiary will have problems and, as she quoted, to check if they are ruthless in dealing with them.

I have been thinking about sleepydragon's observation from a couple different angles. And I think there is a very high probability that he is right.. Do you guys think there is any flight/movement to "value"? One of the economists that I like from Prudential thinks that it is coming in the market cycle. But, I haven't really seen it yet.. Except BRK is rising. But the increase in BRK could also be directly caused by BRK share repurchase. "When we hear hoof sounds we should think horses [bRK buy backs], we should not think zebras [illuminati secret buyers.]" I just received an e-mail saying his client's strategists are shifting to value. I would add that instead of looking for Berkshire rising, we should be looking at "who is falling less" - in general market declines everything ends up going down.

I would bet they bought heavily. Before the buyback date but after the announcement the stock was around 200/b share. Then it quickly bounced up and it is staying up even in general market downdays (and there have been plenty of those). My bet however is that the stock peaked at the same level or a bit above their ceiling, which in september was likely between 215-220. It would be logical for him to slowly move the ceiling up as the months passed, but it is likely he is still buying by 2nd quarter IV estimate and will only revise up after 3rd quarter results...

They have already stated: Abel or Ajit.

I took my wife to a skating rink with a half-off coupon. She called me a cheap skate. ;D ;) 8) not on a first date (I don't think dating is usual in my country, most people never had a first date), but I did buy my wife´s engagement ring with a coupon (she thought I was taking too long and she bought the magazine herself just for the coupon ;D...) however even with the coupon it did cost about 100$ so it doesn't qualify for the thread best sub 50 buys? I would go for the wearables: food, water, shelter, a long warm daily bath... Other than those I wasn't able to remember a single one since this thread has started.

i remember buffett has stated (about other stocks at the time) that he thought they could buy 10% of daily volume without moving the price meaningfully, is some cases up to 20% (if I'm not mistaken. As such it would be wiser to admit a 10% number. However, using August volumes might not be accurate: not sure about the US but over here volumes crater in August due to the holidays)

3 pairs of leather sneakers for a total of 75€ in a street shoe shop, not sure this should qualify as non essential: on the one side my wife had offered me a pair of leather sneakers a few days before (cost 60€ at a 50% discount) and as such I had no urgent need but on the other side I had no sneakers and only two pairs of old used shoes/boots only a week before and as such I now only own 4 wearable shoes/sneakers

And more importantly, what is real IV for today? Because if they buy agressively below conservative IV the gap to real IV will widen very quickly. I would bet 220 and over 250 per b share. I got to 255 yesterday on a slightly modified 2 column approach and don't think I was agressive (if net income from operations is rising 50-60% this year, then applying a 15 multiple to 2017 pre tax earnings, excluding underwriting gains, is the same as it was apllying a 10 multiple before) About the 220, I'm just throwing dards... As far as I know they might agree with the 255 number...

There has been a colonial war in my country in the 60-70s. No one I know answers that question. The most answer like I ever heard was "we were young and they washed our heads, we didn't know what we were doing there". I also heard "I was not on the front line" (that is a semi negation; the fact you weren't on the front line doesn't mean that you never had to actually use your gun...read below) Knowing the answer won't help you in anything, but you can be sure that the answer is something that troubles him: either because he did or because he simply doesn't know (quite common, 20 people shoot a machine gun simultaneously, 10 people are found dead: it might well have been 1 guy killing 10 or 10 killing 10; either way nobody knows the answer and at least 10 didn't kill anyone, but they cannot be sure).

I wonder if the buyback announcement is related to Gates foundation. Perhaps BRK wants to buyback blocks that Gates foundation plans to sell. I would bet that would be the cause. A day after anither big charitable contribution they announce the buyback. Seems to me that if you want to do charity you shouldn't make the charities sell too much below intrinsic value. Bill Gates was likely reluctant to sell shares at recent prices.

Let us do the math: Stock 1 equals 50% of the 100 point index. Stock 1 doubles and is now 66,6% of the 150 point index. Index funds get the same boost in price. It seems to me you are right :o sorry to all

I think maybe i went a little too far the other way actually on reflection, but I did have some difficulty accepting Semper Augustus's view that index investing was exacerbating the thinning out of the distribution of returns so that tech names contributed almost all the gains. Their Berkshire analysis later in their letter was the best I've read. Anyhow, while I like to remember how probability distribution trails work and avoid cherry picking, I was too strong implying that cherry picking accounted for all of it. There is some real skewing going on and the returns so seem unusually concentrated even if we should always expect concentration in gains. indexing effects (in my thinely informed opinion) can be best understood if you imagine only two active investors exist and all others just index: every time those two agree in an above market purchase, all others will follow and bid the stock up while dumping all other stocks to normalize the weighting. This two pronged move will feed on itself until the two investors act again. Applied to the real market: companies in favour to active investors (be it because of momentum or real increase in value) will be bid up by indexing and the remaining will be sold down. Only active investors can stop this trends and will do so only after the first have risen further and the second have fallen further down.

Added brk-b to 18% of portfolio. Reason is the same of the previous post. Downside protection and decent upside prospects. See it as safer than the s&p. i can't imagine brk at 93 but can imagine the s&p dropping 50%. Similarly, I can see brk earning 9-10% long term but can't imagine the same for the s&p.

If It's not asking too much, what other stalwarts do you have? Throughout this year I've intermitently been on brk, google and davita, accordingly to the price fluctuations, but I don't see them the same way I see brk... Thank you. Ps: added brk today. 18% of the portfolio now.

Amazing that on a board that is devoted to Warren Buffett, people justify holding any random stock with a positive yield because it's bought using someone else's money. Buffett got rich through buying large concentrated positions in undervalued securities using the float. Nonetheless, the underlying investments should be analyzed on merit. I recognize that there is a large deferred tax benefit from owning hugely appreciated positions in AXP and KO, however those investments will not from today perform satisfactorily by any standard measure of investment success. The optimistic scenario is 5% returns for those companies. Is that OK to earn on float in a 0% interest world? Sure, but as interest rates go up, there will be alternative investments--especially investment grade bonds--and I would guess those "blue chip" companies will be revalued to reflect that the equity in no growth companies is riskier than the cash coupons from investment grade bonds. Disclaimer: I have no opinion on KO or AXP stocks That being said: 1) tax leverage is for free, if the expected return were a safe 5% BRK would likely earn near 6% with current taxes and over 6,5% with previous taxes. So Buffett would need to find a group of investments that would give him a safe and higher return (while keeping adequate diversification in his portfolio) 2) not growing is not necessarily a bad thing: it means all dollars earned are available for imediate distribution. A P/E of 14 would grant him a 7.1% return before tax leverage. A P/E of 20 would grant 5%. Tax leverage adds 20%. How much do you expect from the S&P500? 3) brk is a big company that made shareholders rich. If you are already rich, your main objective should be to stay rich. So safety in equity investments is a must for BRK, even if at the cost of a lower return. If you are looking for the stars, you shouldn't buy. That was a mistake I made a few years back that cost me a ton of money (sold 5x and 20x baggers to buy a little more than a double). Fortunately i realized on time and had some excellent years that helped a lot). However, after a few years looking for the stars, as you get nearer them, you start changing your mind and now you just don't want to get poor again: now is finally the time to start buying BRK, at least with a decent chunk of your portfolio

it wouldn't matter if the end result was a 10M or 100M profit. Both are insane amounts. What matters is what you risk losing if you go into bankrupcy. In other words: a) If I had nothing to lose: "heads I win, tails I don't loose much" - Pabrai. b) If I had something to lose: "why risking what you have and need for what you don't have and don't need?" - Buffett.

I pitty the guy...how did he get himself to own an empty carcass?