Xerxes
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Posts posted by Xerxes
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1 hour ago, gfp said:
I don't know what they are feeding you Germans, but you guys sure know how to get your questions into the meeting!
1 more just now ! -
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Buffett has some big competition tomorrow. It is also Star Wars Day.
May the Fourth Be With You. -
3 hours ago, Viking said:
Berkshire Hathaway is like an aging elephant. And Fairfax is like a lion in its prime.
Berkshire Hathaway 25 years from now. … with Wall Street watching.
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39 minutes ago, Spooky said:
I like Fairfax's setup here and have added some more to my position recently. But aren't we all jumping the gun comparing it to Berkshire and their position in 1995? To match Berkshire's track record going forward, Fairfax is going to need to significantly shift its asset allocation from 75% bonds to predominantly equities. As a Canadian company, will Fairfax be allowed to do this by insurance regulators (I'm ignorant on the rules here but there must be differences between the US and Canada)? Also, this shift presumes that there will be good opportunities to buy wonderful companies at fair prices that Fairfax can easily shift capital into. Is the investing environment going forward going to be conducive to doing this? Buffett himself has written that the investment arena is much more competitive now and there aren't as many easy opportunities as there were in the past. There are also many people out there now trying to implement the Munger playbook. Lastly, have we seen that Fairfax is able to identify and buy these compounders / wonderful companies? Where are the Coca-Cola's, Amex's, See's Candies, Apples in their portfolio today? Which companies in their portfolio have high returns on assets, are growing and have durable moats?
to flip this comment, we could ask if Berkshire had $25 billion market cap today in 2024, does one expect it to have a portfolio filled with “Coca-Cola's, Amex's, See's Candies, Apples” and the likes of it.
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It is interesting how we the folks in the West are viewing this. Through the lenses of geopolitics .. NATO this, NaTO that, Putin this, Article 5 that, Munich 2008 meeting this etc.
I bet actual Russians and Ukrainians are seeing this as a “family quarrel” or a civil war of sort. Geopolitics being secondary to that.
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1 hour ago, ValueArb said:
According to the FT analysis the last decade hasn't been kind to Warren's public company investments (trailing the S&P 500), but both Ted and Todd have done much worse. Their methodology is pretty ad hoc, so can't attest to the reasonableness of their conclusions.
They make one good point about Berkshire's "permanent capital" giving them an edge that few managers have. But I think overall running a $350B actively managed portfolio is probably the most challenging situation an investment manager ever had. So it's not surprising that even Buffett is trailing the S&P for long periods now.
I'm not sure what the solution can be after Buffett, I doubt the shareholder base has the stomach for an enormous one time dividend or whether it would be enough to lighten those chains to return the portfolio to consistent market beating returns. Even a $250B distribution would leave them with over $100B to allocate, and even if they produce stellar returns that's from barely 10% of Berkshire assets so how much could it move the needle?
If Buffett ever uses a special dividend at some point it will be IMHO for “signalling” reason telling the regulators to chill-out vis a vis BHE. Better to give back it to the shareholders than “throwing more money at bad money”.
I don’t think he will ever issue special dividends for the sake of creating a lower base, to grow from.
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On 4/30/2024 at 8:19 AM, SafetyinNumbers said:
It was a dumb joke that we get more snow in Toronto than Omaha (about 2x actually!).
In reality, when BRK first hit the same market cap as FFH is now in 1995, it wasn’t set up as well as FFH is. BRK was trading at ~2.5x BV and had insurance premiums of only $3b. With that set up, I think FFH has a good chance of outperforming what BRK already accomplished in the last 29 years.
congrats sir,Your article is also pegged to the Berkshire stock news.
On an unrelated note, I am must admit, i am bit confused on the “architect” difference between BRK (pre-GenRe) and FFH today.
Same market cap, but the float size was vastly different as a ratio to each other.
Is that in your opinion an accident of history in their life cycle at those points in time or preferred “architecture” whereby in BRK case most of the market cap was hinged on retained earning as oppose to the size of the float.
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16 hours ago, nwoodman said:
Two come to mind
1. Everest Base Camp Trek - probably the most popular. The Khumbu Valley/Sagarmatha Nationa Park is truly stunning but busy.
2. Annapurna Circuit - not done this one but used to be the “go to”. Apparently not as popular now, as like a lot of Nepal, now have roads cut through to the villages.
3. if I was to do another trek there I would be looking at potentially a base camp such as Makalu or Kanchenjungain in the East.
We really enjoyed the trekking portion of this trip because it was a little off the beaten trek. The rural areas we passed through were stunning. A father and son working together to build their house was particularly memorable.
Nepal is full of the friendliest and most beautiful people on the planet. You will find it hard to go wrong
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thank you so much
happy you had a great time there
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1 hour ago, Sweet said:
Was busy earlier but wondered what you meant by this?
I think it was Koffman who spoke to this more than anybody else.
He suggested that neither the Ukrainian nor the Russian armies today are the armies (in terms of composition) that we saw in early 2022, given the high level of attrition.
Ukrainian army has lost its youngest more capable, Western oriented generation and today the army is led by more its Soviet-influenced officers, coming out of retirement to backfill. These folks are more top down as oppose to Western style self sustained decision making at unit level that characterize the early days.
Also, my understanding was that Western advisors were leaning on Ukraine to use combined-army approach, (land and air forces working in close collaboration to make breakthrough), and that at some point during the offensive Ukrainian high command throw in the towel and revert back to what it knows best: artillery duels. Koffman view (if I remember correctly) was that it was a mistake for the West to lean on them to do something they were yet ready for. Something along those lines. Valuable time and resources were lost.
One thing that Ukraine has done really well is waging asymmetrical warfare in the Black Sea and deep within Russia using drones. It doesn’t win your lands back but I suppose you got to keep hitting where it hurts at the underbelly.
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4 hours ago, Sweet said:
Not sure I agree with that, it might even have been the opposite.
When Ukraine started to push the Russians back in 2022, the US military advised them to keep up the pressure because when the momentum is lost you give your enemy a chance to reset. Momentum is hard to win.
Ukraine felt different, it felt (perhaps correctly) that it's troops needed a break, and that after the Winter they could renew their offensive (now proven incorrect). Instead it gave time for the Russians to dig in and strengthen their position.
I am not sure how much effort the Ukrainians made to breaking through the lines in 2023. There was never a gap that opened so I understand that much of the Western aid (tanks etc) is still available - although this could be bad information too.
you are missing one crucial fact.
Bakhmut.
The city became a political objective for Zelensky both to draw Russian manpower and deny the Russian the city as a victory. That Ukrainian political obsession with Bakhmut is what allowed Russian General Staff to build the incredible defensive Survikin Line, while empty their prisons to support Zelensky’ political cause.
Ukraine may have killed at a ratio of 1-4 (or more) for now fallen Bakhmut, but it could ill afford the 1 vs 4, given the quality of its troops vs human wave coming out of prisons.
Ps : also at some point in 2023, Ukraine moved back from its aspiration to fight like a NATO joint force and revert back to what knows well. Soviet style warfare.
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4 hours ago, Sweet said:
It’s irrelevant who it benefits.
The US tried to prevent the war by publicly releasing classified material in troop build up and Putin’s plans to invade in the hopes Putin would see sense.
Putin launched it anyway. He has only himself to blame. He didn’t want NATO in his border, Sweden and Finland are now NATO counties. Putin the master strategist.
Geopolitics and investing do have one thing in common: Sometimes you get it very right but often you get it wrong. When the latter happens, you need re-evaluate.
Think about how many times Kissinger was wrong, yet we highlight his steering of U.S. toward PRC, and breaking the taboo as his legacy.
Putin certainly misread the situation and the reaction of the West in 2022. Yet, he is more powerful today in 2024 than he was in 2022.
People on this very board and Twitter, made lists of all the things Russia lost since 2022 (sanctions, NATO expansion, brain drain etc.) as if geopolitics is about doing NPV computations.
I would argue that the world that is shaping up today is more aligned to Putin's liking than pre-2022.
I would argue that he is a happier man today.
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On 4/27/2024 at 8:30 PM, Viking said:
Mistakes are going to be made when playing this game. Even Buffett has made his share of big mistakes:
- 1965: buying Berkshire Hathaway itself.
- 1987: buying Solomon preferred shares ("What we do have a strong feeling about is the ability and integrity of John Gutfreund, CEO of Salomon Inc. Charlie and I like, admire and trust John." WB 1987)
- 1993: buying Dexter Shoe Company; compounded by paying for it with Berkshire stock.
- 1998: buying General Reinsurance; compounded by paying for it with Berkshire stock.
Chris Bloomstran would argue very strongly against the #4 statement.
Issuing stock at 3.0x BV to buy a large chunk of bond-portfolio that allowed Berkshire to "diversify" its highly skewed equity exposure to Coca Cola and others without selling it.
Whether Buffett agrees with that or not, it is irrelevant. He went through the unpleasant exercise of dealing with General Reinsurance derivative portfolio, so he may have a bias.
But the end results is that he issued expensive equity at the right time and diversify away, whether he intended or not.
At the end he was right for the wrong reasons, ... and sometimes it is like that. You take it.
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Biden is buying the dip in Kazakhstan, scooping up outdated assets (possibly for Ukraine)
https://ca.yahoo.com/news/us-buys-81-soviet-era-145127753.html
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1 hour ago, Luca said:
The US would not allow anyone doing the same to them and would retaliate similar to russia if China or Russia would do the same at Canadian or Mexican borders...that's just the empire game.
your logic is not wrong. But where you are wrong is that you forget that the Kremlin lost the Cold War !!You don’t get to lose and get to keep your imperial privileges at the same time.
There are no rules to this game. Only what you make yourself. If Kremlin prevails in Ukraine in 2024-25, then a new equilibrium is established and imperial privileges are restored.
And that is the future that the West is working hard to ensure that does not happen.
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8 minutes ago, Luca said:
How can people not see that this war is brilliant for the US? The perfect excuse to weaken russia perfectly legal and approved by all the western courts etc. China weakened too. PLEASE don't negotiate ukraine but drag this on as long as you can so russia wastes as much military as possible. The US is surely also hoping for more Russian inner destabilization so they can sponsor pro-democracy movements that are US focussed and remove the current leadership.
Now if you ARE that leadership that sees these moves by the west via your own secret service, what would you do?
Is the western media telling us the full story? Why does no one care about nordstream? Why are we only hearing the same one dimensional pro war arguments on the telly?
The western populations were perfectly prepared to accept this war and the media sector for the most part played perfectly along. Dudes like tucker etc will be removed and called nuts, right winger whatever for even talking to putin...
see 1854 Crimean War, it started off as helping the “sick man of Europe” (Turkey at the time, Ukraine today) against an aggressive Tsar, but soon became “let’s get glory while we are at it”.
2022 war would have become the same thing with NATO boots in Ukraine if not for the MAD doctrine, where some sort of “equilibrium” is de facto established. -
On 2/19/2024 at 5:22 AM, Luca said:
Taiwan and Japan, Asia is just amazing...
I went in 2023 to Japan, my second time after a 15 year hiatus, my first time was in 2005. I missed seeing both times Nagasaki.
I have a thing for old Portuguese colonies. You can add Gao, Macau to that list. I did see Malacca and Penang in Malaysia.
it is interesting how memory works. I went to see the Shogun palace in Kyoto in 2005. And I had good memories of my visit for +15 years. when I visited again in 2023 the exact same location in Kyoto, the museum of course had not changed, but I have no longer access to my 2005 memories. They are now superseded by 2023 of the same location.
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8 hours ago, nwoodman said:
We are just back from trekking to Mera Peak (6476m) in Nepal. Despite its reputation as the highest but easiest of the “trekking peaks,” we still only got three out of our party of 12 to the top. Two dropped out on the way to base camp (5200m), and the rest made it to high camp (5900m), but a combination of cold and altitude took its toll. I considered our acclimatisation route to be very conservative, but altitude just affects everyone so differently.
I set out with my two boys and a friend’s son around 2am. Unfortunately my oldest son turned back due to the cold (-16C) but the youngest (16 YO) made it to the top. It was a great experience but reaffirmed that anything over 6000m is always going to be a challenge.
hiwell done sir.
is there a specific peak or trail you would recommend for first timers in Nepal ? Which is more than a hill but not a killer.
I have been up to +5,000 meter in Peru. Not a peak per se, but across the rainbow ridge.
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1 hour ago, dwy000 said:
Not sure how a Russian justifies it.
Long Live the Empire
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38 minutes ago, Sweet said:
Young men in their 20s who had their life ahead of them and who risked it all. That generation was just different. They say they were the greatest generation and I think they probably were.
I don’t know where I read this. It was about someone who was watching Masters of the Air who was recounting a conversation he had, I think, in the 60s or 70s with one of those retired bomber leaders post-war, and how someone in his early 20s could have so much responsibility.
The person then mentioned that he wouldn’t trust his own 20 year old with a wheelbarrow.
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There is nothing wrong with politicians starting wars offensive and/or defensive, as they are there to led and we elected to do just that. Or in some cases they put guns on our head and said elect me.
However I expect every one of those same politician to put their owns sons and daughters right in the frontline, ready to give their lives for that vision that was so important.
I think this should be in fact a requirement.
Skin in the game.
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https://ca.yahoo.com/news/frontline-ukrainians-fear-aid-u-083843561.html
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Biden promised the arms shipments would begin immediately and hailed what he called “a good day for world peace.” The reaction here, near the front lines of the war, felt very different.
Oleg sighed when The Daily Beast told him about the events 5,000 miles away in Washington, D.C. “Are you serious?” he said. “Now this war will just continue.” …..
….Soldiers told The Daily Beast Russia hopes to take control of the city in the Donbas region by May 9, the World War II Remembrance Day for Russia and other post-Soviet countries.
Throughout much of Ukraine, a collective sigh of relief has been felt, and many far away from the fighting feel that finally, they are receiving the aid they so desperately have needed. But in Kharkiv, 19 miles away from the Russian border, some residents are angry that the U.S. is resuming its aid.
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Was never fan of L3.
When it comes to the defense industrial complex, I am only interested in their priority and/or consistency in returning capital and the longevity of their program.
RTX and Lockheed come ahead as they have a focus on FCF per share and EPS. It is worth mentioning the CEO of Lockheed comes from the American Tower fame.
And you can see that in spade. They are the only ones that put in place large ASR when market fell below franchise value.
Northrop and General Dynamics comes next. Great franchises and very term runway, but very consistent capital return policy (too consistent as they always return 100% via dividends and buyback). But no desire to reduce share count considerably beyond what their FCF allows them to if a special situations gives them that opportunity. Northrop own’ slides shows a focus on FCF but not on FCF per share.
and I don’t where L3 is at
Berkshire Hathaway Annual Meeting 2024
in Berkshire Hathaway
Posted
I thought clarifying Greg A. as the end-all capital allocator was important.
Clearly ahead of T&T.
It is a company for Christ's sake with a CEO as the top dog, not a socialist political party with different fiefdoms, where grey zone (potential conflict) could exists between T&Ts and Greg in the post-Buffett era.
T&Ts are in fact legacy of the Ancien régime, where Buffett needed help with getting ideas, to incubate and seed large positions.
In fact, the entirety of equity investment portfolio besides the very large 4-5 and Japanese positions are not really worth keeping and/or spending time. Greg may or may not keep them, but it is his call to make. I would clear the deck in year 1.
Buffett had the best-in-class lieutenants during his time as the benevolent CEO, so he had free time chasing Paramount, Activision and Cable cowboy's tracking stocks etc. Totally insignificant, but it kept him busy. The fact that they exist is a historical to how Berkshire came to be.
Greg would be running the business as an industrialist-operator and not as a founder-equity-investor.
No time for trading stocks.