KPO

I actually think there’s a possibility that coming out of this inflationary period in a few years that we might see some deflation. My view is more based on demographics than our crappy balance sheet, but both can be true. I hedge this by keeping a modest amount in TIPS & t-bills, which may be foolish but provides income. As a thought exercise I’d be interested in your thoughts on why it wouldn’t be better to invest in ‘forever assets’ like Berkshire or even CVX.

Worth watching: https://www.forbes.com/sites/garthfriesen/2026/04/25/spacex-ipo-is-forcing-changes-to-index-and-underwriting-rules/ If I’m a financial advisor that typically defaults to the indexes, do I like this? Second order effect….what are my alternatives? Many hate Berkshire because they have limited tech exposure and no SpaceX or AI exposure. Check out the second largest SpaceX shareholder. Who now has exposure to AI, but not to the tune of 35-40% of net income as the S&P has? Berkshire is spreading their bets and becoming a better index. I like what I’m seeing from Greg in this first two quarters.

I’ve been at this game a long time. I think Fairfax is a really solid company and I was buying heavily during COVID, but I focus on unforced errors. A signal that they will eventually unwind the TRS through a modest unwind will go a long way in my view. I’m probably starting to fall into the old and conservative bucket like old man Buffett, so maybe I’m out of touch, but I’ve never been down more than 10% in any one year over a long time horizon so I like to think I’m not totally foolish.

Exactly. Create a construction platform, chemicals platform, retail platform, etc. and let the CEOs of each manage. Of course they already have the insurance platform. Makes sense to me. I do hope they start selling or winding down irrelevant companies where they have no prospect of scale to maximize cash flow.

I know most everyone here thinks it’s impossible for the TRS to go sideways on them, but it seems like a modest negative feedback loop has already begun. Would have been a great move to have closed out 20-25% of it several months ago. While it’s not a probable death sentence I still think it’s an unnecessary corner case risk if we otherwise like the direction of the business without creating unnecessary catalysts for the short selling community.

Yes. If there isn’t a directive, Greg isn’t doing his job. I don’t think one of the 4-5 largest purchasers of connectors, anchors, and truss plates is buying from Menards, or paint from retailers. At least I’d hope their supply chain is more sophisticated, or soon will be. If not, it’s a great efficiency opportunity lost, plus it would be disappointing to see them financially supporting the competition.

This will role under Taylor Morrison eventually: https://www.claytonhomebuildinggroup.com/clayton-properties-group Top 4 home builder before any additional acquisitions as far as I can tell. #1 if we want to include Clayton. There’s no doubt all of the above give lift to Shaw, Benjamin Moore and the other owned building products companies. Would love to see them buy AOS as well, but probably too pricey when you layer on an acquisition premium.

It is. I did work on it and several others before I recently landed on Lennar B shares. This and the press release language from Greg is good news for Berkshire’s future. He’s clearly not viewing the assets under Berkshire ownership as a random assortment of businesses purchased over the last 50+ years, but as platforms for future vertically integrated investment (e.g. Summit homes and other site built, Shaw, Benjamin Moore, Johns Manville, MiTek, etc.). Now they just need to buy RYN or WY to have half the inputs covered at reasonable acquisition prices.

Playing offense with cash in a somewhat bombed out sector…..and a Sunday afternoon press release. The Abel era has begun. I like it.

I bought on Wednesday and it’s already up $175. I wasn’t expecting that and was planning to buy more, but it definitely moved a bit. Fascinating company. I was very late to it, but better late than never!

More TAP and PGR

Starter in CSU yesterday, more GFL today

PGR starter

More GFL

First of all I like companies that make tangible necessities, so no concern around AI displacement. Second I like market share leaders in a business that’s a near duopoly. Third they’ve grown free cash flow at an ~8%CAGR over 25 years, have raised the dividend for 30 years straight, bought back 2-3% of their shares per year over the last 13 years, and have done all this with a balance sheet that has had net cash more years than not. It’s currently trading at a 25% discount to its 20 year average P/E and EV/EBITDA. I’ve wanted to own it for years as it’s a very well run company that still has a trustworthy family as significant shareholders, but it’s always been expensive, which is why I’m averaging in now. I’m not particularly worried about the results in the last few or next few quarters.

More AOS

Possibly, but to @yesman182’s point if we see real illegal vape enforcement that represents a favorable change in the competitive landscape, but I think some of that has been showing up in the share prices of BTI, PM and MO the last 6-12 months.

FDA relaxing nicotine pouch and vape enforcement standards and to a lesser extent rotation into stable cash generative companies.

Reduced BTI by a third

Starter in AOS. 2nd helping of GFL.

Normally I would be more focused on the management, but these assets have scarcity value with or without this management team.

Sure. I’ve owned RSG since the GFC and have found it to be one of my most resilient holdings. The stock is up around 7X and the dividend on my cost basis is more than 12% as they routinely increase the payout. The resiliency of the waste business is due to its duopoly nature at an individual market level. While the barriers to entry are relatively low to start a waste company, the key is landfill ownership as zoning new landfills anywhere near a major metro area is close to impossible. And if you start a waste company you’re paying tipping fees to RSG, WM, WCN or GFL. On this front GFL has an attractive portfolio of landfills, particularly in relation to the size of the company and its enterprise value. While GFL tends to be comfortable with a fair bit more leverage than I generally like, they seem to be a solid operator and have done a nice job of quickly building scale. I’ll probably continue to build a position in GFL (and/or SES) on any additional share price declines.

Starter in GFL. Probably early, and hate buying subordinate shares, particularly with this much leverage, but waste is a great business that’s hard to disrupt.

Sure, but when things go sideways it’s amazing how correlated everything becomes. At least that was one of my GFC takeaways. Like I said, it was a brilliant move at the time, but it’s less obvious if it’s brilliant to keep the position open. I just think a gradual exit would be prudent.

So you don’t think it exposes the company to a potential negative feedback loop? It was a great call when they did it, but with the stock up ~4X since then I feel like it’s time to unwind it. Facts below: 1. The Mechanics of the Swap In a TRS, the company (the "Equity Receiver") enters an agreement with a bank (the "Equity Payer"). The Bank pays: The total return of the stock (price appreciation + dividends). The Company pays: A floating interest rate (usually SOFR + a spread). If the stock price goes up, the bank pays the company. If the stock price falls, the company must pay the bank the difference in value. 2. Risk During a Market Correction When a market correction occurs and the company's share price drops significantly, the TRS shifts from an asset to a major liability: Cash Outflows: Unlike owning physical Treasury shares (where a price drop is just an unrealized accounting entry), a TRS often requires periodic cash settlements. If the stock drops 20%, the company must write a check to the bank for that 20% loss to "square up" the swap.