SHDL

A related point is that, mathematically, IV becomes more sensitive to small changes in growth rates as interest rates go down. For example if your discount rate is 10%, reducing growth from 3% to 2% results in a 1/8 reduction in IV, whereas if your discount rate is 5% the same reduction in growth results in a much larger 1/3 reduction in IV. If people were surprised by what the blog is discussing, it may be because they were relying on their financial intuition that they developed back when interest rates were somewhat higher.

I agree, and taking this line of thought one step further, I actually think that buying BRK with leverage may be a sensible strategy for some. The idea is that if you really think BRK is a low risk moderate return investment, then by applying some leverage you should be able to “convert” that into, say, a moderate risk high return investment. It goes without saying that you need to be careful about what type of leverage you use and how much, but I can see it working quite well for the type of people who hang out around here. Personally I do something like this by allocating a chunk of money that otherwise would be in my bond buffer to BRK, meaning that I’m effectively buying BRK with money “borrowed” from my bond buffer.

Thanks for sharing. I personally took a somewhat less sophisticated approach but my bottom line was more or less in line with yours. My rough estimate is that the company effectively earned around $32 bn during 2018: - 17.2 bn from the railroad, utilities/energy, and MSR segments - 12.0 bn in look-through earnings from the stock portfolio - 1.5 bn in interest income earned by the insurance group - 1.6 bn in insurance underwriting profits - (0.2 bn) in other losses So on a $490 bn market cap we have about a 6.5% earnings yield. Combine that with modest assumptions about growth and inflation going forward (say 3% real growth, 13% ROE, and 2% inflation), and we can probably expect a long term nominal IRR of around 10%. Not too bad, all things considered. PS: On your question about the 13% tax rate on dividends in the blog post, my guess is that state/local taxes are the culprit.

IIRC the story here was that Berkshire already had its huge stake in American Express when it converted to a bank holding company. Buffett then asked regulators if he could hold on to his shares, and they said okay — as long as he meets certain conditions (like staying passive and such).

You can ignore the Politics section by following: Profile > Modify Profile > Ignore Boards Options > Politics No way to ignore specific threads though as far as I know.

I haven't read the paper but it sounds interesting. A bit surprising that these facts weren't known until 2019...

I stopped using MS products more than a decade ago but I still hear amusing stories from other people about them from time to time. Most recent anecdote: A guy was composing a very important client email using Outlook and it froze up. Not only the application but the entire OS. So he turned off his laptop by pressing the power button and turned it back on, only to find out that Outlook had already sent the incomplete draft he was still working on to both his client and his boss. He quickly sent out an apology/explanation email and people were cool with it, and I guess that says something about MS’s moat, but stories like this are enough to keep me away from their ecosystem.

That is what I think is the zillion dollar question here. 8)

I think SFIX might interest you. I’m sure you can decide for yourself whether you like it or not, but at least it does come with a nice list of characteristics that turned off most VCs in its early days and will likely keep many stock pickers away for quite some time: First off, it’s a clothing retailer that mainly caters to women. I.e., one of the worst businesses known to man. And yes it’s an online retailer, but no you can’t search & choose what to try; instead they do the choosing for you. In other words, this is no Amazon. Financially, their revenue is growing fast but their margins are not. So, no, actually this is a lot like Amazon. Oh and by the way they never, ever, discount their merchandise, so people can forget about finding any good deals there, and on top of that their shipping is super duper slow. So clearly Amazon is going to come and eat their lunch, and you know what, the founder/CEO is on a 16-week maternity leave in the meantime. Still interested? :)

That makes sense. I generally thought it was a lot more serious than what one might expect from a black comedy film. Viewers should calibrate their expectations going in - because it isn't another Dr. Strangelove.

For me, The Death of Stalin started pretty well but then became a bit too distressing as the story progressed and turned darker and I could no longer tell what was parody and what was not. Maybe that was the point, but anyway. Drive (2011) was an excellent recent find. The Last Jedi (2017) was pretty controversial among Star Wars fans (unsurprisingly) but I liked it. I’ve met certain heroes/legends in real life and I thought the film gave a pretty honest depiction of what it means to be one.

The fact that they’ve done very well during market crashes is probably a big reason why their institutional clients love them: their returns are uncorrelated (or even negatively correlated) with other major asset classes. My reading is that most of these investors would happily invest in such a fund even with okay-ish long term expected returns. So if you can do that and get ~15%, I imagine you’re golden. But again, that’s all about running a fund as a business. There are probably easier & better ways to invest if you’re just managing your own capital…

That sounds like an extremely impressive number for what I understand is a multi-billion dollar fully-hedged cigar butt flipping fund...

Thanks, they were tough though. They are incredibly smart and stubborn, two qualities that make it very tough to keep them. That fence was my first attempt at keeping them in and it failed miserably. I thought I could just put up some electric wires and that would hold them. Nope. Then I drove posts into the ground and used a heavy gauge chicken wire. They just climbed over it. Then I put the electric fence on the inside of that fence, they tunneled under it. Then I buried the wire fence 1 ft into the ground, but they pulled it out and got under it. Then I drove 6 foot steal re-bar every 2 ft and tied the wire to it. That stopped them for the most part, but they still climbed out once in a while electric shocks be damned. And the horse gate I had, they learned how to unlatch it with their mouth just by watching me, I had to put a spring loaded clip on the chain to make it secure. It was a constant battle. Sometimes they would refuse to go in at night and it would literally take hours. Other times they were sweet and lovable and you could walk them around the neighborhood on leashes like dogs. If they got mad at you though, they'd hold a grudge and not listen to you for days. If they were angry at me, I'd have to have my wife put them out in the morning and bring them in at night. And when they were angry at her I'd have to do it. We had 30 chickens, 2 rabbits, and a dog, which were all easy as can be, but the goats where just a constant headache. They ate everything too. All that grass and the trees you see inside that fenced area was completely gone the first summer. Every time they got out they would demolish our vegetable garden and flower gardens. As fun as they are at times, I wouldn't recommend anyone keep goats. Best story I read in a while. So I shared it with my wife. Wife: "That sounds awfully familiar... Were you a Capricorn by the way?" Me: "Yup." Wife: "I knew it, I just knew it."

That's possible. Hard for me to say though as I don't really know what he does...

Yes, but creating a sense of scarcity does work as a branding tactic - in many cases brilliantly.

I agree it was a fluff piece for the most part, but again that is what one should expect from an astute operator. You want to give out just enough to make your clients feel good about their investment but not so much that your competitors can actually mimic your strategy.

I think those of you who are into this stuff will enjoy reading the following: http://www.philosophicaleconomics.com/2016/01/gtt/

Surely you mean SHLD. ;)

+1. It’s also probably not a bad time to put (back) on some macro hedges (SPX puts and the like) if you’re so inclined. But generally speaking, the US is set up in a way that ensures that almost all bad macro events end up being temporary, so if you’re invested in high quality companies and your investment horizon is long enough it’s probably perfectly fine to ignore them. Even if the trade negotiations with China go wrong and end up causing a huge recession, no big deal, it just means Trump will lost the election in 2020 and the tariffs will be taken down by his successor.

Well, what a surprise to see this name come up here. If I were to associate a human face to the enigmatic Japanese stock market, his would be my pick.

Yup. As far as negative sentiment indicators go, chaos on CoBF is a pretty powerful one. Way more informative than any amount of "panic" on CNBC.

Because my frivolous bet against Jurgis angered the investment gods? :P No but more seriously, even BRK behaves in a strange way from time to time and those tend to create interesting trading opportunities. My favorite is when it sells off with the financial sector for no good reason just because it's a big component of XLF and other ETFs.

Okay, let's revisit this thread on 1/17/2029. ;)

Yes, we'll see. I'm happy to bet $5 that Berkshire will outperform the S&P over the next 10-20 years.