Xerxes

Reposted here what is the highest level of a theoretical BRK breakup it can have ? the stock portfolio is mostly held at the insurance as other stated. So of Buffett’s famous four pillars*, three of them are entangled but that leaves BHE, the fourth pillar, as the easiest (relatively speaking) to spin. am I correct in stating that ? * insurance, BNSF, BHE and Apple

In hindsight, Allied World was bought by issuing shares being issued at or above book value while the bulk of the share issued were bought back over the next 5+ years by repurchasing those below book value. Some substantially below book value. Don't know the exact numbers, but that is a job well done. Even if it was not planned that way.

From The Economist

Some interesting parallels between the Crimean War of the 1850s and today. Few interesting excerpts on then different points of views, as seen from their capitals. First excerpt explains the overwhelming role the Tsar played most of all in the conflict. But not just him. Everybody played a role and wanted to have their pound of flesh. Think of then Turkey as Ukraine, both victims of Russia. Think of today’s Russian oriented Donbas (Ukrainian territory) as then pro-Russian “Wallachia and Moldova” that were formally part of the Ottoman territories. Moscow coveted both then and now. The next except, is the rise of anti Russian political views, in London that started to shape its foreign policy. It was the epoch of the “Great Game”. The Queen point of view that Britain foreign policy was being held hostage by a blank check provided to the Ottoman court by the British Parliament. Even after the earlier Russian defeat in the Balkans, the “war party” needed to have its war. The full course. Invasion of Crimea was launched soon after. Ref: https://www.amazon.ca/Crimean-War-History-Orlando-Figes-ebook/dp/B004QGY3YI/ref=mp_s_a_1_1?crid=21MWP0FQRPBO1&keywords=crimean+war&qid=1678032962&sprefix=crimean+war%2Caps%2C118&sr=8-1 Disclaimer: This post is for entertainment purposes only, no need to reply that the two wars are actually different etc etc

I can understand fascination toward Fairfax Financial, which is managed by an actual value investor [Watsa] who breathes value day in day out, but I don't understand this fascination with Markel. How much of that fascination toward Markel comes from the "value investor" community for no other reasons that the company advertises itself as mini-Berkshire, and tailor its communication to that community. Why there is no thread covering the Canadian insurance company called Intact [Ticker IFC.TO], which beat Markel over the past 10 years, but just doesn't do any folky talk and/or charm offensive. What is so special about Markel ?

The way I see it: Everybody was off on the "Ukraine will fold within a week" back in 2022. They surprised every body and above else, they surprised themselves. The late spring and summer 2022 could have turned differently, was it not for Western intelligence support, SpaceX, sanctions against Russia. West did not provide any major h/w back then, but it provided a moral legitimacy to the conflict, if that was not already clear. Fall of 2022 was about when Kremlin taking a step back, as it geared and re-directed its economy and industrial base for the long conflict. In the meantime, while manpower was being raised, they needed to "fix" Ukraine attention somewhere, both giving themselves time and bleeding the enemy. Enter the mercenaries. Ukraine slowly wisen up to Bakhmut, and even it start using its 'lower quality' troops for Bakhmut. In parallel, General Surovikin was tasked to wage a defensive war, hold the line and to decimate the country' infrastructure. Winter 2023. Ministry of defense takes formal command from General Surovikin and everything gets to subordinated to Gerasimov, including Surovikin. And that is where we are now. I don't know how the 2023 Russian offensive will unfold. But I would say that the "shock" that Russian military felt in 2022, it was the same "shock" Ukraine felt in 2014. So in many ways, Ukraine was more prepared as it had many many years to get ready. It had no choice. So do not assume, Russian cannot learn. They got their "shock" 8 years later than Ukrainian. But they can adapt. After all, Ukrainian and Russian ruled the Soviet Union side by side for decades. They both know a thing or two, once they put their mind to it.

I agree with that (as it concerns the resetting a basket of mortgages that would be coming due every month). That is the view from from a bank point of view that has a large portfolio of mortgages. I am looking at it from a household point of view. If you had no choice but lock-in at 4-year at 4%. That is it for you until you are due, no matter what the inflation does or what the bond market yield is going to be. Unless you break it. As a homeowner with mortgages (one half due in 2027 fixed at 1.65-1.7% and the other ~3.1% due March 2024), I think the better bet for me in 2024 is actually try variable rate now that the risk-reward has tilted toward in favor. Also legions of variable rate holder had converted to fixed when the rate had gone up, I can bet you that Canadian banks would be offering good discount against the prime to entice people back.

Russo on Berkshire on Yahoo Finance Explains how the alignment of agency cost is so unique and unusual for Berkshire

@SharperDingaan Say i have a 5-year mortgage (1 year in, so 4 years left) fixed at 3%. Tomorrow, the treasury bonds wobbles and drops pricing in a recession, are you saying that principal/interest ratio on my fixed payment would change ? just so that I understand

To be fair to Viking, I think while his post put up references about a podcast and the call-option framework, the reality is that he is (i think) retired from working for somebody else (an employer). Therefore, he has to think about his family needs in the short term as well as the long term. And not just long term. Whereas the "time in the market beats timing the market" is valid more for someone who has steady flow of cash coming and just investing the surplus, knowing that he/she does not need them.

If Christopher Blomstran were to read this he would say: "The Media and Viking are having a field day about Mr. Buffett's headline cash position, ignoring the liabilities"

The 10-year bond yield will have an effect of the fixed-rate mortgage. Therefore "new" mortgage buyers (not existing who got their mortgage) will see a windfall. However, variable-rate mortgage is hostage to the central bank rate changes. So you assertion about "instantly lower mortgage payment" is only valid if central bank lower rates and it applies to variable-rate mortgage.

needs VPN. Not available for Canadian.

You are most welcome sir. Cheers

Don’t watch “Under Siege” anymore !! lol https://amp.cnn.com/cnn/2023/02/27/europe/vladimir-putin-steven-seagal-award-intl-scli/index.html

Good interview w/o chest thumping. It is really a geopolitical shitshow out there.

no longer available. I even looked for it on YouTube

The word "inflation" came up exactly once. Our job is to manage Berkshire’s operations and finances in a manner that will achieve an acceptable result over time and that will preserve the company’s unmatched staying power when financial panics or severe worldwide recessions occur. Berkshire also offers some modest protection from runaway inflation, but this attribute is far from perfect. Huge and entrenched fiscal deficits have consequences

Good read on production rate, inventory etc

1.) throw Ukraine under the bus 2.) give Putin whatever he wants 3.) 1 + 2 = 3 I added a third one. All about branding. "I told you so ... they were going to f*er it up, and there we are " will be the cornerstone of his campaign

In regards to my comment about major defense contractors

Fareed asks a very relevant question: with the exception of unconditional surrenders in the Second World War 1939-45* most wars ends in negotiation and settlement. I think I made that comment six months ago. * or perhaps 1937-45 if you are Chinese, but hey ! who cares, we care when it affects us so 1939 it is ... Sullivan answer, which is script that repeated by all administration: - This is Putin's war - War of Choice - It could end tomorrow No shit Sherlock ! We know that. That was not the question ... was it ? Fareed interview with NY Times on their most recent article One Year Into War, Putin Is Crafting the Russia He Craves - The New York Times (nytimes.com) The West Tried to Isolate Russia. It Didn’t Work. - The New York Times (nytimes.com)

The globalists and the "war party" needs to address this very soon ...

I was hoping for much more given all that took place in 2022. That said I enjoyed it. My take is that Buffett letters will continue to be short and less detailed going forward. Simply put as the rate of change of the Berkshire canvas drops so will rate of the change on the letters year over year. This tells me that he is happy with his canvas and how it looks. So boring does it. When Fairfax letters get to be 10 pages (and very high level) as well, you know that Prem Watsa has done it !

I bet you will see 5x more references about Oxy than TSMC. Actually I think there would be no mention of TSMC