Xerxes

Thx $2.9 billion plowed into high-yield. That is 7% of the 40% portfolio.

It should be clarified the voluntary actuals cuts are way below that number. the rest of the so-called "cuts" are economically driven cuts by higher-cost producers that no longer have a viable option. Bottom line I guess it doesn't matter, the Kingdom and Kremlin's intend was to have some supply-side destruction through economically driven cuts by higher-cost producers. 5 years down the line, I suspect the duo will be looking at a much larger, centralized U.S.-based oil and gas industry. The resources in the Permian basin are there and wont disappear because the Saudi market share strategy; the small E&P players, companies themselves, holding those assets may go bankrupt being unable to utilize the assets, but those assets can easily move under a stronger name through consolidation. In time, the short term gain of wiping out smaller U.S. E&P players would mean a larger player consolidating on the other end.

It should be clarified the voluntary actuals cuts are way below that number. the rest of the so-called "cuts" are economically driven cuts by higher-cost producers that no longer have a viable option. Bottom line I guess it doesn't matter, the Kingdom and Kremlin's intend was to have some supply-side destruction through economically driven cuts by higher-cost producers. 5 years down the line, I suspect the duo will be looking at a much larger, centralized U.S.-based oil and gas industry.

I offer a different perspective on FFH buybacks ... Notwithstanding their limited financial capacity to do all the things that they want to do, if the market is discounting FFH book value by a large margin, them deciding to prioritize buyback of their own shares ahead of everything else (i.e. other financial obligations), is akin to them averaging down on their current equity portfolio picks indirectly since it is the drop in their equities picks that overwhelm FFH own share price to begin with. So, the question for FFH management would be … is their current equities picks (larger ones anyways) are worth indirectly "averaging" down (through FFH buyback) given the new market paradigm shift or has there been a permanent loss of intrinsic value on same major names, where the trade-off to do FFH buyback (i.e. averaging down their equity picks across the board indirectly) is no longer worth it,,, and it makes since to average down on specific names or open new position. I suspect, we all also have the same dilemma in our own portfolio, … given all we know now, do we buyback our own portfolio in its entirety as a lower price, or be opportunistic on key names and new names. So FFH buyback calculus might revolve around the same thing … looking forward to Thursday :-)

Agreed. I think though it more of an opportunistic buy on an asset class they know well. Small bet though. The whole bet is at $1 billion on the four o&g companies. In contrast, they gave about $45 billion to Masa Son's vision fund through equity and pref equity. On a different note, interestingly Norway sovereign fund, in contrast to 2018 where it was buying the dip, as been off loading its equity to fulfill its obligation with its government. I agree it was smart. It'll always be a temptation to trade the asset class they know (and can manipulate). Maybe nothing wrong with that, but wonder if they've only recently come to the realization? There has been an internal tug of war I think within PIF, Aramco etc as to how best invest. With MBS pushing more for Unicorn investments (Vision fund, Uber and Tesla) and the old guard pushing for more earthly ideas. I recall an article on WSJ from last year that was talking about how investments in solar energy had a lot of opposition from than Aramco chair (he lost his job mid-2019). Now with PIF selling out Tesla before its monster rally, abundance of bargains in the old economy and not committing to Vision Fund 2 to me that means the pendulum has swung back in favour of earthly ideas. That said, I think they will keep Uber. I realize that Uber gets lots of flak as one of the larger unicorns. Personally I believe in Dara, the super app potential that Uber has and the portfolio of optionality it has.

Agreed. I think though it more of an opportunistic buy on an asset class they know well. Small bet though. The whole bet is at $1 billion on the four o&g companies. In contrast, they gave about $45 billion to Masa Son's vision fund through equity and pref equity. On a different note, interestingly Norway sovereign fund, in contrast to 2018 where it was buying the dip, as been off loading its equity to fulfill its obligation with its government.

Saudis Take Big Stakes in European Oil Companies Looks like PIF is finally able to put money to work on tangible assets at depressed prices as oppose to Masa Son's intangible https://www.wsj.com/articles/saudis-take-big-stakes-european-oil-companies-11586382353?mod=hp_lista_pos1

if not posted already https://www.wsj.com/articles/warren-buffetts-death-spiral-deal-11586192660

https://business.financialpost.com/investing/saudi-arabia-has-bought-8-stake-in-worlds-biggest-cruise-operator-carnival-for-bargain-basement-price Not exactly the world's savviest investors, but still ...

He wanted to buy in Dece 2018. He was working on a big deal that they couldn't get across the finish line. I believe he explained this publicly in an interview. you are right. I do recall that. But unless the deal he was working on was so gigantic, it doesn't explain its low buyback during the downdraft. it is not like he cannot focus on two things at the same time.

I actually find his silence re-assuring. Give him time to assess his data and re-arrange his chessboard. I wonder if he was expecting this "bear correction" to take place as the market plunged in Dec 2018. I recall some folks here were pretty concerned/angry why Buffet didn't do a major buy in Dec 2018 when the F13 filings came out in Q1 2019. Probably because he was expecting a major downdraft in Dec '18 that actually never happened ,,,, and was postponed till 2020. In between, he bided his time was able to collect more ammunition …. while taking flak for missing the "buy the dip" in 2018.

Folks This is a great interview; about an hour long. for some reason the CNBC website went under the paid wall. But you can watch it on YouTube for free.

What is horrible for Prem, if he claims to be a value investor, is that he failed to pick up high quality value in 2010 and instead hedged a cheap market; and then turned on a dime when Trump was elected and decided that the economy was going to take off, but felt quality was too expensive and chose to express that view by investing in cyclical value which crapped out the minute a cloud appeared. It is a staggeringly poor series of decisions. :-) now he has a chance to buy Berkshire at 1.05 BV or so

Thanks Santayana, My concern is very simplistic, i know; it is just that FFH cannot have it both ways, being unable to capitalize on a bull and bear markets. In terms of liquidity. I think their constraint does play a part in some of the things they want to do but don't believe it is a liquidity crunch. The upcoming AGM meeting would be very useful for me to decide to if by back end of the year, I need to sell FFH or not. I hope not. Either way, I plan to keep FIH till 2030 at least. Have a look Bill Ackman who was able to change and become an activist against himself when he screwed up with the Valeant bet. He stepped back, reformed and came back. And most recently he was able to turn his long macro view a on dime and decide that coronavirus would a major problem for his long portfolio; he made a bet on CDS and made billions. That is pro-active hedging and a flexible mindset. In FFH, as early March 2020, in the letter to shareholders, Prem talk about his short duration bond portfolio not having any exposure to rising interest rate. How is rising interest rate was a concern in Feb./March in a world that was on the edge of getting toppled over by the compounding mathematics of COVID-19 ? it seems his macro point of view once solidified (through '16 Trump election) refuses to change. But then again, I could be completely wrong, ;-) we could all be pleasantly surprised, when at the AGM in a few weeks, they reveal their hidden CDS hedges (ala Ackman) and reveal that now they are sitting on a massive realized gain. Gains that they plow back on those insurances business and their own shares …. with enough leftover to buy the rest of RPF that they don't own. That would be acceptable.

If they couldn’t do well in a bull market and couldn’t do well in a bear market, than the mistake is mine to hold them.

From the blackberry call this evening: Analyst: given macro environment, how much do you need and what are your plans for the convert Chen: after paying the convert we $385m of cash/equivalent. we made some assumptions (guessing he means scenarios. We will pay back the convert, but saving $23m on interest, obviously cash balance will go down, we also assume the debt market is closed so assumed no financing ...…. quite comfortable that they liquidity

It may be obvious, but I would also add that do you want to have 500 CEOs reporting to you as a S&P500 owner, or just 1. Do you want 500 CEO zigging while the market is zigging also, … or do you want 1 CEO zagging while the market zigs. Think of BRK management as a "allocation valve" ensuring a contrarian zig-zag.

Letter to shareholder from Gerry S. https://ml.globenewswire.com/Resource/Download/4bdb91ff-7bb5-4f32-b5fb-f82d4a1e2de5

I think the real bargain had to be had when everything got thrown out. Good or bad. Now it will be more systematic

I am certainly guilty by being ignorant and thinking it will blow over. Certainly when it first reached Italy, I should have adjusted my view but failed to do so again and again. The fact is 70% of us economy is consumer. And that consumer is not spending now and won’t be after the wealth destruction that we saw in stock market. So there bound to be an economic downturn and I need to protect the long only portfolio. Certainly it is not directional bet like it was with dow at 28,000 a month ago, but I am not making a bet and just want to some insurance if the black bear turns into monster grizzley.

Thx I rather go with Canadian index to buy put against. It has less liquidity but don’t want to convert to USD now. And I think I am more bearish on Canada than the US

Hey guys Question for the collective you If I don’t trust the current rally what would you recommend as an downside protection tool against the whole market. Would you recommend puts on SPY or Dow. I think puts against Nasdaq is pointless as they would likely do well or less worse. 6 months period ? Sorry for the simplistic nature of the question. I am an optimist so hard to think like a bear.

Thx John for the link. Very informative and timely. My view is that Berkshire has no interest in buybacks in the short term (close to BV or not ) till they know which direction the event will take the US economy. Once certainty is established on the vector then perhaps it become 1 bird in the hand vs. 5 bird in the bush (as oppose to 2 bird in the bush) Woodstove I saw the very same interview. I think he was making up for his last interview where he said “hell is coming”. I am glad to see he is long and Optimistic

Is that calculation with the lower book value that will kick in ?

I guess my stupidly belongs to the category of jokes. Might as well drop it here. Bought BAC at round $15, about 5 years ago, enjoyed the dividend increases from nothing to what it became. Ride it all the way up to $35 and all the way down to $19 when I sold it this morning.