watsa_is_a_randian_hero

TVIX can typically be borrowed at Interactive. That is a pretty dangerous short if you get a spike in vol though. However, long term, TVIX should average declines of over 50% per year.

For the record I am short some of the 30 year through futures. However, I look at it less as a speculative position and more as a hedge position. I tend to typically carry a small margin balance, and in addition I have been in the market for buying a rental, for which I would need a mortgage. The margin balance is based off of short term rates. I cannot personally enter into a libor swap in order to lock in rates, but by shorting the 30 year future I get similar economics, essentially locking in a borrowing cost.

I have looked into this but apparently my broker (Interactive) has had trouble in the past obtaining shares of UBT to short, and it can be expensive.

RE: losing shirt...Yields can only go to 0. There are limited losses on this short.

I wouldn't do any ultrashort (levered product). These will have value erosion from the funds selling low and buying high every day. If anything I would short an ultralong product. Aside from this, you could also buy puts on TLT, short TLT, or short futures contracts/options

30 Year Treasuries are at 2.64%...anyone short? I believe if one is looking for a inflation hedge, shorting the long bond right now is a much cheaper (from a value investor perspective) way of doing it as compared to going long gold. Thoughts? Does anyone actually own any treasury bonds or treasury bond funds with a maturity longer than 10 years?

After I got to the point where I had multiples of my spending saved, and my savings as a % of after-tax income was well over 50%, I realized how dumb it would be if I got hit by a bus tomorrow and never got to enjoy any of it. I had always assumed my life would be divided into 2 phases; one in which I aggressively pinched pennies until I reached a certain net worth level that I could retire on if necessary, and then use that financial stability to start my own business in the 2nd phase of my life. However, I have now decided that if it means I don't get to phase to until age 31 or 32 (vs. 30), and I get to enjoy my late 20's more, then I might as well spend what I want, not worry, and look at it as a hedge against death or divorce.

I used to be very cheap when I was younger... I have started to spend more, paying up in many areas for quality. Partly out of a change in philosophy in marginal utility of spending vs. savings (while I am still young, I have decided enjoying some of my money while younger is a hedge against death or divorce), and partly out of a growing recognition that paying up for quality can be a better value at times. Clothing - higher quality clothing will fit better and last longer. I am very skinny; off-the-rack clothing fits me poorly. I buy most of my suits/dress shirts custom fit now. Clothing is very important to your appearance and presentation of your personal brand. Prospective clients can be superficial and judgmental (consciously or subconsciously), and this can affect one's success. Food/alcohol- This falls into more of the 1st bucket, change in philosophy. Treat myself to nice restaurants/bars on occasion. Vacations- Definitely 1st bucket. Treat myself to splurging for nicer lodging, etc now and enjoy some of my money in my youth. At this point I live in an urban area, and so I don't own a car nor do I own a home. Spending on transportation / housing are still minimized on my books. A lot of this is just a matter of deferred gratification and drawing a balance between not living like a complete cheapo, enjoying some luxuries while still in 20's, while also still saving the bulk of my after-tax discretionary income.

I think that's just a cut & paste of the bloomberg headline, which was in caps. all caps was copy/paste from bloomberg

he probably recognizes that one of the biggest ways he can extend his life expectancy is to frequently be screened for things like this to catch them very early.

bloomberg

wondering if anyone is knowledgeable on this name and can give me the 15 second rundown on why its trading at a PE of 3x (besides the obvious of natural gas tanking and having Russian government as majority owner). What other major risks are weighing this down?

+1

apr fools?

that doesn't mean stock certificates didn't exist prior to the IPO stocks can trade OTC

Chicago, IL Originally from Cleveland, OH

I've had similar experience in phoenix. I've been trying to buy a rental for the last year in the 150k price range. To give you some idea of how the market is changing fast...the last property we bid on, the ask was 147, we bid 150 the 1st day it was on the market. We did not get. The property had 18 bids in one day. Was sold for a cash bid over the ask price. I have found cash is king. Bank REO sales will sell to a cash buyer who can close fast even if they receive higher offers that are non-cash. Some other sellers are doing the same thing. Cash is especially good now because of tighter scrutiny on the appraisers. With the market now seeming to rebound slightly in phoenix, appraisers are now appraising very conservatively, and higher bids will not appraise. Therefore, if you are a seller, and you receive a number of offers, and one is cash and it is reasonably close to the others, you'll take the cash offer because an appraisal will be unnecessary.

http://www.thirdpointpublic.com/reports/quarterly-letters/

While I also argued Tilson's valuation was a little aggressive, let me be the first to say I think this analysis on seeking alpha is flawed. -The analysis gives no benefit to the fact insurance liabilities on average have cost Berkshire nothing. Tilson gave full benefit to this. I argued it should be somewhere in between, because even though on average the liabilities have cost nothing, they still pose risk for large losses in any given year. -The analysis compares the free cash flow yield on berkshire to AAA bonds in order to conclude it is fairly valued. He understating free cash flow yield by using an overstated denominator by including operating liabilities (insurance liabilities) as part of EV. Furthermore, he does not give benefit to the fact berkshires FCF will grow, while a AAA bond's cash flow is fixed. And finally, a AAA bond is not even the correct instrument to compare Berkshire too. Berkshire's debt is not even rated AAA, and its cost of debt is higher than the FCF yield he calculated, so his conclusion is illogical.

one more to go: www.kony2012.com

??? What relevancy does that have? Berkshire does not post collateral daily to its shareholders. None, I wasn't responding to your point about BRK. I was responding to your misguided assertion that a CDS contract offering default protection on a name with the same counterparty has no fundamental value. well, i wouldn't say that was "misguided." may be the case now that contracts are mark-to-market with collateral; pre-2007 that wasn't necessarily the case for most contracts. Sorry if I am belaboring the point, but CDS contracts and other OTC derivatives are executed through the broker dealer community and governed by master ISDA agreements that require daily MTM and posting of collateral. This has been standard market practice since the 1980's. Prior to 2007 though, many of the largest dealers in space operated without mark-to-market, unless certain downgrades occurred. This is what killed ACA, what almost killed AIG, and many others. Further, CDPC or Monoline providing credit protection on LSS's (which often included themselves within underlying baskets) did not post a dime of collateral.

??? What relevancy does that have? Berkshire does not post collateral daily to its shareholders. None, I wasn't responding to your point about BRK. I was responding to your misguided assertion that a CDS contract offering default protection on a name with the same counterparty has no fundamental value. well, i wouldn't say that was "misguided." may be the case now that contracts are mark-to-market with collateral; pre-2007 that wasn't necessarily the case for most contracts.

I would argue the liabilities are not completely costless. On average, yes, they are. But if someone told you if you to take a bet, where if you roll dice and get snake eyes twice in a row, you owe $1 million; but if you don't row snake eyes twice in a row, you receive $772, would you do it? The offer has an expected value of 0 (same concept as an insurer with average CR of 100), but that doesn't mean the payout will be 0 on any given roll. Insurers face large tail liability. Do not take that risk on for free. By adding in the full value of float liabilities (or taking the full value of investments), you are taking the risk on for free. EDIT For the record, I would think the value of berkshire is somewhere near 150k, similarly to tombgrt. This would imply about a 10x multiple on op-earnings (calculated by buffett, not tilson, and a 20% haircut to investments (to account for tail risk & tax inefficiency).

Buffett is correct in his letters from the 90's...these are the 2 fundamental inputs (investments & operating income) for valuing berkshire. He never espoused what tilson is doing though.

??? What relevancy does that have? Berkshire does not post collateral daily to its shareholders. In practice, the stock has not and will not trade as if there is an embedded put. During times of crisis (financial or cat-insurance related), Berkshire runs the risk of losses (just as its peers), and the stock will fall. Fundamentally, this "put," as it was stated, has no value (but may offer technical support). If a mega-cat event (9.0 earthquake on sanfran, cat 5 hurricane on new york) happens, Berkshire will have 10's of billions in losses, the stock will fall with the rest of the industry, and buffett won't buy back a dime of stock in order to remain financially sound.