wisowis
-
Posts
241 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by wisowis
-
-
Sold OPT.TO
(Figured all the shenanigans would lead to a pop sooner rather than later. For more info on the story, I found this post: https://chaptertwelvecapital.com/post/optiva-the-perils-of-a-controlling-shareholder/ ).
-
US CPI out this morning for April, -0.8%, following a -0.4% for March.
https://data.bls.gov/timeseries/CUSR0000SA0?output_view=pct_1mth
Sitting at 256.4 right now. More details by category:
https://www.bls.gov/news.release/cpi.t01.htm
Many of the categories with large weights haven't budged, like Shelter, interestingly.
-
Curious what merger arbs people are looking at, given how much spreads have blown out now. I recently posted a thread for NorthView REIT (cash offer of $36.50, currently trading at ~$32), but here are a couple images from FT (h/t PlanMaestro) with some of the spreads on recent deals:
https://pbs.twimg.com/media/EUURmKDWkAAoZUZ?format=jpg&name=large
https://pbs.twimg.com/media/EUUR442XgAc0a6l?format=jpg&name=large
-
@tobi started wearing a mask
but he is having some issues
"Practical question though: How do you make your glasses not fog up?"
Billionaires.... they are just like the rest of us. :)
It's ill-advised, perhaps even Irresponsible for non-experts to promote wearing of masks during a pandemic to a population unaccustomed to wearing masks. New mask wearers will fiddle with the masks from discomfort, thereby increasing their risk of transmission by transfer from their hands.
Here are two McGill University medical experts weighing in with that message:
No it isn't. Regular masks (not N95) prevent asymptomatic people from infecting others. They're quite effective elsewhere and should be worn by all. They shouldn't replace other measures, and people should be educated about them (as they have been in asia), rather than assume they're too dumb and shouldn't wear them. See:
https://medium.com/@thejanellemj/please-join-me-in-wearing-a-mask-71e0e3f4fe4a
Otherwise, it's like saying that people shouldn't wash their hands because they might do it badly and get a false sense of protection from it, or whatever...
It's not about people being dumb. It's not even necessarily about education. It's instinct. When you first grow a beard, it will be itchy, and you WILL scratch it. But you get used to it over time.
If you want to get a population used to wearing masks, you want them to get used to it OUTSIDE of a pandemic, because INSIDE of a pandemic, face-touching is a major cause of transmission.
You have exhibit A above. Tobi wears a mask, and his glasses fog up. What does he do next?
I am asking for the evidence that shows that new mask-wearers won't touch their face, not for evidence that masks work to prevent aerosol-based transmission.
-
@tobi started wearing a mask
but he is having some issues
"Practical question though: How do you make your glasses not fog up?"
Billionaires.... they are just like the rest of us. :)
It's ill-advised, perhaps even Irresponsible for non-experts to promote wearing of masks during a pandemic to a population unaccustomed to wearing masks. New mask wearers will fiddle with the masks from discomfort, thereby increasing their risk of transmission by transfer from their hands.
Here are two McGill University medical experts weighing in with that message:
-
“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
― Robert A. Heinlein
-
BRK.B, CSU, BAM.A, TD
-
Why would there be a difference if a large holder sells in the open market and Berkshire buying from the open market, than Berkshire buying from a large holder directly? There shouldn't be.
And if Mr. Buffet truly cared about bringing down the share count through some large blocks, he'd start to cancel some of his own shares. But he doesn't because of how much he enjoys writing "I haven't sold a single share and don't plan to" every letter.
-
Excellent summary of the situation
https://en.wikipedia.org/wiki/2019%E2%80%9320_Wuhan_coronavirus_outbreak
Any thoughts on how to prepare? Far from a 0% probability that the Coronavirus comes to the US.
Face mask prices have gone way up online and supplies down in the US FYI.
This was actually a good read and probably bolstered my belief in what I wrote earlier. Lets see what the confirmed numbers look like in a week or maybe a month. But so far, you have barely 100 total cases outside of China and 0 deaths. You also have a death count that is bolstered by people with other conditions and complications, which is always important to consider as well, even with the common flu.
A week later, maybe some 300 total non China(although like 90% of regions close to China), and just 1 outside death(in Hong Kong).
Vulnerable people are not the most likely to be traveling. As WHO said yesterday of the cases they've studied in China, "82 percent had mild infections, 15 percent had severe symptoms and 3 percent were classified as critical".
For reference, influenza has a fatality rate of 0.1% and a lower transmission rate than nCoV.
-
Efficient Market Theory evangelists in tears, asset worth thousands of dollars picked up on the side of the road for free.
May I suggest that you donate that money back to the library if you ever sell it, given that they are a non-profit.
Here is a 1st/1st, also was a library book. Listed for $9k. https://www.abebooks.com/servlet/BookDetailsPL?bi=16758996144&searchurl=an%3DBENJAMIN%2BGRAHAM%26kn%3Dsecurity%2Banalysis%26sortby%3D1&cm_sp=snippet-_-srp1-_-title8
-
Merry Christmas!
-
It bothers me that this board continues to use the insecure http protocol.
You can actually connect to https, but clicking on any link redirects you back to http.
This site should switch to secure protocols, please read (from 2016!): https://blog.mozilla.org/tanvi/2016/01/28/no-more-passwords-over-http-please/
-
We sold our multi decade-long position during the third quarter after first trimming the
position during the second quarter this year. We went into some detail in our change of
thesis on Berkshire in our last Client Letter. In short, Berkshire’s industrially/economically
sensitive businesses have slowed considerably over the course of 2019. Their utilities
business (Berkshire Energy) needs continued acquisitions to restart utility growth. In
addition, Warren Buffett’s cash hoard of +$125 billion continues to be a considerable
impediment of growth, rather than our previous hard expectation of a valuable call option
on opportunity in the hands of one of the most elite capital allocators extant. Further, the
efficacy of putting this cash pile to work (plus +$25 billion in annual operating cash flows in
Omaha) will be paramount if Berkshire Hathaway is to once again regain their former status
as a meaningful grower over just baseline U.S. GDP growth. Thumb-sucking has not cut the
Heinz mustard during the Great Bull Market of 2009 – 2019. The Great Bull could have been
one helluva of an astounding career denouement for Messrs. Buffett and Munger.
In terms of errors of omission by Buffett & Co. over the past ten years, a few stocks stand out
to us as considerable head scratcher errors that should have been in Buffett’s wheelhouse,
and should have been huge winners for Berkshire shareholders. The first stocks are
Mastercard and Visa. Buffett is incredibly well-versed in the payments processing industry
given his half-century knowledge in longtime holding American Express. These two stocks
should have been layups for Buffett. Mastercard and Visa have been massive wealth creators
during the Great Bull Market.
Indeed, since the Great Bull started back on March 9, 2009, Berkshire Hathaway B stock is
up a notable +269% through the recent ending 3rd quarter. Over the same time period, the
S&P 500 Index is up +370%. Mastercard is up a stunning +1,521%. Visa is up a near stunning +1,137%.
Not all is lost, though. Buffett’s two CIO lieutenants currently own both
stocks at a combined weight of just a thumb-sucking 1.50% of Berkshire’s current equity
portfolio. The current combined weighting should be 15.00%!.
Two other layups are Costco and Microsoft. Buffett has had at his disposal unrivaled expert
tutelage on each company in his hind pocket for years – but to no shareholder avail. Charlie
Munger has been a director at Costco for 22 years. Costco’s stock Great Bull gain is +522%.
Once again, not all is lost. Buffett’s lieutenants currently own a whooping 0.55% position in
Coscto.
More numbing still is Microsoft. Buffett first met Bill Gates nearly 30 years ago. They became
fast best friends. In 2004, Gates joined Berkshire’s board of directors. Buffett probably
spends more time talking with Gates (Gates Foundation and bridge playing too) each day
than he does with key Berkshire vice-chairman employees Ajit Jain and Greg Abel. Buffett
has long (and proudly) proffered his opinion that “technology” companies are far outside his
“circle of competence.” His more recent multibillion foray into IBM and Apple belie his longheld assertion.
In our view, if Buffett can endeavor to figure out the business models of both Apple and IBM enough to pour
multibillions in stock purchases, then figuring out Microsoft’s business model under sensai Gates
should have been Remedial Technology 101. Microsoft’s stock Great Bull Market gain is +657%.
A final lament, if Berkshire’s current Breaking Bad-style cash hoard represents stock market
timing, then shareholder-partners deserve to be informed of as much.
On this capital allocation front we have growing concerns. Buffett & Co. have repeatedly
stated their considerable disadvantage in competing against private equity (with levered
billions in tow) for acquisitions, yet Buffett & Co. continue to play this game – very un-Buffettlike, in our opinion.
Buffett has also repeatedly offered his opinion for a few years now that
if interest rates would stay at their current low levels then stocks aren’t (weren’t) expensive,
yet Berkshire’s equity portfolio on a net basis to total corporate assets hasn’t really grown
that much. (Our portfolio does though share Buffett’s success in his outsized Apple position.)
Last, despite Buffett’s share-buyback tutorials – and our perceived signaling – over the past
few years that he is open to large, accretive share repurchases, little has been done on this
front as well. (Buffett seems to abhor returning “capital paint” to shareholders while his
Berkshire canvas is still “in paint.”) Net-net, capital allocation needs to improve dramatically
in order to reaccelerate the current stasis of middling, GDP-like growth. Recent billions in
capital investments in notable mistakes such as IBM, Lubrizol, Precision Castparts and Kraft
do not inspire confidence that Buffett & Co. are still at the top of their game. Any future
conviction of ours in Berkshire Hathaway shares will closely mirror that of Buffett’s own
conviction in Berkshire share buybacks.
-
Almost doubled my position in AYR. Possibly the best risk/reward and margin of safety Ive seen in a very long time. Now trading at basically 2.5x 2020 adjusted EBIDTA. Buyback starts October 1st.
I'm not familiar with this kind of company but the numbers look interesting. How do you evaluate the risk of leasees not paying?
What do you mean by leasees not paying? They do not have the model that relies on leasing. ...
My guess: he's talking about Aircastle ($AYR), you are talking about AYR strategies ($AYR-A.CA).
-
Assigning an idea to the person who started a thread and assuming that this person invested/held that company since the thread start is really questionable methodology. After that GIGO.
Yeah... e.g. Cardboard on the top-performing users. His performance was entirely driven by Amazon. But he suggested that as a short idea, calling it a fraud. Oops. http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/amzn-amazon-com-inc/
-
Opens with a bombshell example:
Navin Seepaul is a 29-year-old single dad who makes $30,000 a year as a barber. He owns a $1-million house in Brampton, a sprawling suburb northwest of Toronto. Each month, the payments on his roughly $700,000 mortgage are $4,300. On top of that, he has $24,000 in credit card debt.
To help pay the bills – even just the monthly interest charges are staggering – he rents out his basement to three or four students, and two truck drivers rent bedrooms on his second floor. At any given time, the young father has six vehicles parked on his property.
Credit cycle is turning:
Worried about household debt, the nation’s bank regulator is forcing the big banks to hold more capital to guard against potential loan losses. At the same time, the banks are becoming increasingly stringent about loans, making it harder for customers to refinance and consolidate their debts. Others are seeing interest rates on their lines of credit or credit cards increase with no explanation.
“I can’t go to my bank now and shift my Visa balance onto my line of credit,” says Scott Terrio, manager of consumer insolvency for Hoyes, Michalos Licensed Insolvency Trustees in Ontario. “That is a big deal. It doesn’t sound like much. But that’s what people were doing for the last five years.”
When people start running out of options, that’s when you’ve got trouble coming, according to Mr. Terrio, adding that insolvencies in Ontario are increasing at a pace not seen since 2009. “When those doors start to close," he says, “I think the next insolvency peak will blow 2009 away.”
-
-
Also BRK
-
It’s been almost a year since the below post and I’m still waiting for Uranium to get moving.
I bought some NXE, CCO, and EFR.DB today.
This second half of this podcast by Mike Alkin who is a former hedge fund manager and now runs a Uranium dedicated fund sums up the bull case quite well.
I bought some EFR.DB-TSX yesterday.
It’s a pretty interesting piece of paper to have access to a potential Uranium bull market while getting paid to wait. Maturity is Dec 2020, strike is C$4.15. Implied vol of the outstanding warrants is over 60% while the debs trade at par.
The debt issue is also a small part of the capital structure and I don’t think they will have a problem raising money but of course I think the debs could be a multibagger.
So from what I can tell, the interest rate on the debs varies between 8.5-13.5%, depending on the (weekly) spot market price of uranium oxide. Management doesn't expect the price to exceed 54.99 by 2020, the price above which the interest rate increases (and price is currently at 22.75$, from Google).
Any reason to be optimistic about a bull market in uranium?
Yes, I think so. The current Uranium spot price is too low for anyone to make money. Most producers locked into long term contract pricing much higher than spot which are expiring over the next few years. In response, Cameco and other large producers have decided to cut production and use existing inventory and buy in the spot market to fulfill production in order to preserve their resource for higher prices. Utilities will have to negotiate contract pricing soon and it will likely come in well above current prices. It’s a classical deep cyclical play that is complicated by an opaque market, two tiered pricing and extremely long lead times.
I bought more yesterday with the stock surging higher and a holder of the debentures being forced to sell for what I can only assume are liquidity reasons.
EFR down 36% and EFR.DB down 9% on rumours that Trump will reject the Section 232 petition. Yikes.
-
FYI there are a couple of pages of relatively recent discussion about the FFH prefs starting here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/canadian-prefs/msg353578/#msg353578
-
Good article on KKR, with praise for Berkshire from Henry Kravis, and how KKR will change its operations going forward. Cheers!
http://www.businessweek.com/magazine/content/09_51/b4160038935523.htm
This link is not active. Could you pls repost. thanks
-
AZP.PR.A (yesterday)
Same here
-
So in the beginning of the letter he says he is changing how the value of Berkshire is reported in his letters.
Long-time readers of our annual reports will have spotted the different way in which I opened this letter. For
nearly three decades, the initial paragraph featured the percentage change in Berkshire’s per-share book value. It’s
now time to abandon that practice
He then goes on to say this about buybacks:
When a company says that it contemplates repurchases, it’s vital that all shareholder-partners be given the
information they need to make an intelligent estimate of value. Providing that information is what Charlie and I try to
do in this report. We do not want a partner to sell shares back to the company because he or she has been misled or
inadequately informed.
Call me crazy, but that sounds to me like reluctance to buy back in size when he was providing investors with per-share book value as the metric to be used to calculate intrinsic value.
I think this is him telegraphing that he is now open to large buybacks, now that potential sellers have been "warned".
-
pretty hard to beat tax free leveraged return if you buy a home
Historically, on average, real estate appreciation has pretty much followed inflation with a little extra, no? And there are all kinds of maintenance costs that people often forget to factor in when they cite how much they've made. Most of the return seems to come from leverage, which is fine, but we shouldn't forget that carrying a lot of debt can be a problem (price can fall, hells angels can move next door, houses can have expensive problems, etc).
Tax free is nice, but a lot of people invest in tax-advantaged accounts too, and the friction to buying and selling tends to be relatively high, if you're not someone who knows real estate well and can bypass a lot of the fee-takers.
To me, buying a house has a lot of non-financial considerations too, so looking at IRRs vs renting is only part of the story. Some people want to be real estate investors and don't mind flipping houses and moving every few years. Personally, I have no interest in that.
So if inflation is roughly 2.5%. leveraged at 5x = 12.5%. and since it is tax free it means if you have investment income you need to be roughly returning 25%, unleveraged befote taxes...
i think for most average canadians owning a home , one home that is your principal residence is a fairly safe way to generate wealthy over the long term—
The leverage isn't free!
Would you leverage 5x at 3-4% mortgage rates to return 2.5%? And in Canada, you may have to renew at even higher rates after 5 years...
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
Warren Buffett’s Berkshire Hathaway buys stakes in Japan’s five leading trading companies
https://www.cnbc.com/2020/08/30/warren-buffetts-berkshire-hathaway-buys-stakes-in-japans-five-leading-trading-companies.html
The official news release: https://www.berkshirehathaway.com/news/aug3020.pdf