Xerxes

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me. And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will. Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity". From what I've seen generally the bunch that point that "ABC" has missed the opportunity just because the markets went up tend to correlate well with the bunch that claim that nobody could have seen "XYZ" event coming when asked why they don't have any money anymore. Also, pretty sure Buffett doesn't give a shit about "the game" or how he should play it. Like who? Can you name any? Because once again, we saw most of the guys on top of their game, even some of the more prominent bears buying stocks in March. We saw BX and BAM buying RE hand over fist. We saw the Saudi Wealth fund buying hotels and entertainment companies. And we saw the guy who invented "the game" who "doesnt give a shit" about it now, capitulate at the bottom.... Gregmal Saudi wealth fund invested less than $10B at bargain price, while they got hoodwinked into investing $45B to SoftBank vision fund. That $45B is now value trapped. The game is about doing less stupid things and knowing the downside risk over the long term. It doesn’t help that they did one right thing after one large stupid thing.

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

As an investor, would one rather pay high performance/mgmt fee to Ackman to buy BRK on one’s behalf or does one directly buys Berk, and implicitly pays $100K salary to Buffet as CEO. Ackman thesis was that Berk will deploy its cash. That didn’t happen. He can buy it later. and keep in mind that as Fed ramps down its support there will be distress opportunities both for Berkshire and Howard Marks from Oaktree. Us, the individual BRK shareholders, are just doing time arbitrage while the above takes place (real distress opportunities) . Ackman, the hunter, will be going for a few kills before coming back to BRK. He is paid to hunt. That is his job.

I think Ackman did the right thing. A hedge fund should be actively looking for opportunities rather than invest into a long-term hold. Folks don't pay Ackman his fees so that he parks money into Berkshire.

Did Prem got the best return for his shareholder (I.e fiduciary duty) under the present condition for Tor Star. The optics looks weird with Paul but if the answer to the above is Yes, than we are all good. At least in my simple mind.

Thanks Thrifty That would be awesome, though given that he was referring to the dividend, it kinda tells me he was thinking as an equity position and a contributor to his $1 billion interest/dividend target. Those equity swap seem like an interesting way to take a directional bet on the market with minimum upfront outlay, but if a market bounce is your bet, I think the swap are best employed against the overall market, rather than individual names. What is the point of doing that unless you were doing on technology "stay-home" specific names. Anyways, these swaps are completely outside my plain vanilla area of expertise, not that I am an expert in plain vanilla investing either. but I do know common sense.

Good news is that as Resolute marches into oblivion it represents an ever smaller portion of the equity portfolio, so less damage going forward. Bad news is that Resolute is not marked to market, so its quarter to quarter valuation never really hit the bottom line in a good or bad way. Good news is that it has seen a few write offs and those had already hit the book, so unlikely to see more. I never looked at Resolute earnings in the past ten years, no clue if the earning it contributed diminished in a massive way.

Absolutely, he even referred to the exact same CNBC interview that the Exxon CEO was talking about the dividend. And I had watched that interview prior. Funny thing when 13F came out last week, although I did not see Exxon I did see Chevron as part of their holding. And was just wondering if between Prem and his managers if there was a mistake on what exactly they bought. I hope that is not the case but with these guys losing money on their shorts in Q1 ... who knows what’s going in the black box. I hope that there is a perfectly good explanations for these snd that my biases are just biases. Unrelated to 13F mishaps, buying Exxon and Chevron at their cyclical low is the right way to invest as a value investor. Buying Stelco at its cyclical high is a bad value investment as a value investor.. No margin of safety will protect you when the denominator “earning” collapses in a recession. In fact often times, (Not related to Stelco) the stock value drops less than the earning collapse, in which case, you actually get multiple expansion even as the absolute dollar value of your investment goes down and your ROI gets to the cleaners.

I am new, didn't get to read most of your RE views in the past 10 years. That said, Enjoy the time off ! All the best and enjoy the summer.

Ok so it is really a yield thing. Getting higher yield, which was otherwise unavailable prior. I thought credit spread snap back would mean meaningful capital gain.

It says average age of 4 years for the corporate bonds. In their pre AGM memo update.

Folks Would it be fair to say that the $2.9 billion that FFH invested in March when credit spread blew out, now that Fed stepped in and closed opportunity for distress fixed income investor, those spread have narrowed, so ... does it mean that a significant portion of that capital gain would be marked-to-market as unrealized gain by close of June (Q2). I think that capital gain is front-loaded where you see most of the snap back happen in Q2 ... and the rest panned over several quarters. This is 7% of the $39 billion portfolio. The position is significantly larger than Blackberry, Resolute and Seaspan combined. This fixed income unrealized gain on its own might in turn snap back the discount between market and BV. What am I missing here ?

you guys are absolutely right. I recall at one point Buffet saying that he is not disclosing his foreign holding because he doesn't have to and that those names are Berkshire's internal information not available for public disclosure. i am paraphrasing. and that if SEC didn't require him to disclose U.S. holdings, he wouldn't.

I also recall Red Hat and IBM merge arb from way back when. They got to do more of those, lever to the hilt, but not screw up as bad as Long Term Capital

Funny thing, off memory I don't ever recall seeing Recipe, Stelco or Eurobank on 13Fs prior to this one. Though I could be wrong.

Here is a better link https://www.holdingschannel.com/13f/fairfax-financial-holdings-ltd-can-top-holdings/ odd, there is -500 next to Blackberry !

13F https://fintel.io/i13f/fairfax-financial-holdings-ltd-can/2020-03-31-0 Not easy to read with the format. I see a minoooor position in Alphabet. I don't see Exxon; must have been post-March. Looks like at the AGM throwing in Alphabet and Exxon was more about "marketing". Two things stand out: sold half of J&J and added more to Micron.

What a the advantage of using a swap instead of just buying the index if the bet was rebound in the market ?

Don't hold your breath. They'd have had to have sold some of their big positions to do anything meaningful, and they have not mentioned doing so. As an aside, the Dundee/DPM transaction yesterday shows how they could, in theory, offload some of the big stakes if they wanted. Indeed Unrelated (and I know that it is impossible at the moment) but if FFH was able to buy back its share at 0.6 BV with the same total quantity that it issued shares ABOVE BV for the Allied World purchase in 2016 that would have been a quite a coup worthy of a song.

13F is couple of days. We will get some real answer if the equity investment attitude is changing

generally speaking if one wants a good return one needs to be radically right when the market is saying something else and one should be ok with that divergence of opinion and capitalize on it. Otherwise Index consensus investing is the way to go. But also, it is also true that when one averages down on a stock too often it is sign that the initial thesis was off. I made more money when I averaged UP on a stock. At this point though I think FFH has probably become deep value itself. I just cannot believe that Prem with his 90% holding wouldn’t have an economic interest to right ship AND his reputation. I am staying course.

Clearly a very polarized name with very diverse and interesting point of views. Much like the Tesla thread but without the Muskism. Covid 19 changed the chessboard, I rather wait to see what the new generation would be doing. Starting by this quarter 13F. I like to think I should not underestimate someone who built a multi billion dollar business and his capacity to learn from mistakes. I sold Nvidia few weeks ago after a good run from $130 ish. At least that is what I tell to comfort myself when I look at my melting FFH holding ....

Thanks Parsad Very clear. Just that Ford, Eaton example where family is given handouts are not encouraging when the business is just a piggybank. I am guessing that is why Buffet has personal holding of JPM and Seritgae REIT is that he can compliment his $100K salary without touching his shares with dividends.

Unrelated Q1 13F seem to be due on Friday and Thursday for FFH and BRK. It would be interesting to know what are top personal ownership of FFH management. How much of their wealth is tied to FFH percentage wise. About FFH dividends, if that thing is turn off permanently it helps keep a good chunk of cash in and puts an incentive to increase value per share for the large owner-operator as oppose to live off dividends. Heck, the dividend outlay should in fact be used instead for share repurchase.

What’s there to not like ... he is got 99% of his wealth in there. If you put your 90 plus percent wealth (equities) your and Warren interests are aligned.