Xerxes

Are we talking returns or risk-adjusted returns. If the latter, Berkshire. Easy ! If the former, there in lies the enigma

Cheers. For me, those 'reminder' are always good, I think, so that one sticks (& continues to stick) to the good stuff (me anyways). A counterbalance, if you will, to my daily noisy consumption of Bloomberg and CNBC.

Why Berkshire Hathaway's Utility Business Is a Crown Jewel | Barron's (barrons.com)

Viking, i never understood where you got the $500 million figure. I don't think that it is from Prem, because I usually remember his statement. Did you just take the average for the past decade of the "short" bucket, it came out to $500 million per annum. That is what I tabulated in the 2035-year thread, which I guess i will update this Thursday for 2021. REALIZED LONGS 2011: $703 million (equity) + $424 million (bond) 2012: $470 million (equity) + $566 million (bond) 2013: $1,324 million (equity) + $65 million (bond) 2014: $596 million (equity) + $103 million (bond) 2015: $818 million (equity) + $26 million (bond) 2016: ($184) million (equity) + $648 million (bond) 2017: $200 million (equity) + $419 million (bond) 2018: $1,326 million (equity) + $106 million (bond) 2019: $792 million (equity) + ($55) million (bond) 2020: $392 million (equity) + ($102) million (bond) REALIZED SHORTS 2011: zero 2012: $6.3 million 2013: ($1.350) billion 2014: $13 million 2015: $126 million 2016: ($2.634) billion 2017: ($553) million (almost all of it in Q4 2017!) 2018: ($248) million 2019: ($20.7) million 2020: ($311+$542*) million *included Other which I believe are the TRS

I didn’t mean sell. And hedging nothing to do with buybacks and dividends or their innovation. Apple is theirs to keep. I meant if they would hedge Apple via options. Since there is a market for that. There is no such market for BHE or its railroad, the other 3 of the BRK 4 pillars.

How surprised or relived people would be if they find out that Buffett had built a large hedge against Apple at this stage, when his letter comes out. If Apple is a not-to-sell digital industrial pillar of Berkshire, but if there is a liquid market out there that allows you to hedge yourself, wouldn’t this be prudent thing to do for Omaha at this point.

FFH always advertised themselves as one with lumpy return and Markel does not. To me as long as they (each) match their “Restaurent” menu with what they are actually selling. That is all good. Current & prospective investors will gravitate to preferred menu. I suspect a lot of people have gotten into FFH at a good price vs. Intrinsic value and now that they are in, they may want a “smooth” Markel-like operation. I cannot say I blame that point of view. To me that periodic FFH discount is the discount due its lumpy rerun model. If I am all in at discounted price, there is a tendency to not prefer lumpy model going forward. That said, I am happy with lumpy return. I added to Alphabet (finally after 4 years). So I get my smoothies elsewhere. FFH shorts were different story. When you at 100% hedged, for so long, against a long portfolio. That is the anti-thesis of lumpy return. So it had to go.

I don't know what you guys are talking about, i have had a very comfortable 40% return on Exxon in the past six months and about 20% in the past 3 months. I liked that they grew their dividend very modestly last year. They binged on debt to finance their $15 billion dividend and now that has been paid back as well. Very conservative. Granted, it took a few years to exorcise the ghost of Rex Tillerson. Now with their break-even at the $30s, this is their time, let the operating leverage kick-in and fill their coffers.

There was a gentleman who was managing FFH's bond portfolio. What happened to him ? I recall people were saying here how he is the bond-king etc. But i have not heard of his name praised in the past 24 months, Or is his absence really a function of the bond portfolio sitting in semi-cash for 4 years now.

I watched his interviews with CEOs all the time. More for what CEOs say than what he says. Still I think he brings in value. At the end, it is a show. I think there one element that is missing in Jim Cramer shows. He only talks about buy and sell. What he should comment on is position sizing.

Just an opinion: I always thought of the TRS swap position as an accelerator. But that accelerator needs jet fuel. We had a few buckets of jet fuel: (1) bounce back of the underlying BV which usually lags, (2) news related to Digit and the hidden value and (3) the tender offer itself. Is there a #(4) bucket of jet fuel somewhere ? I doubt it. Keeping the TRS position now seems counter productive, given its +/- need for cash outlay that it generates on a quarterly basis. Either way, it was good of them to put in place when the did, but has the risk/reward ratio been tilted now ? When they close it up. Hopefully they ll be clear on much they made on it.

Scan the asteroid for its composition (gold, nickel etc.) and short whatever commodity it has within because the marketplace is about to get a massive supply glut. Head to the freezer. Re-emerge 3,000 years later. Of course RBC Direct Investing is still operational and as is the internet. Close the shorts and capture the windfall. Get on Corner of Berkshire & Fairfax and showcase the CAGR for the return thread for the Year 5022.

United States immensely benefitted from its geographical location (surrounded by two large oceans)*, its natural endowment & resources, and that it became that natural candidate to take the mantle of global leadership from the United Kingdoms and Europe. While United States proper (continental US) remains unscathed throughout the war and turmoil in Europe, I think the geopolitical changes were so immense that it is wrong for Jeremy Grantham to sit there and casually observe that how bad the market return it was, as if most people stayed in the market and were watching Jim Cramer on CNBC etc. There were so many hurdles in life that individuals had to go through (relatively better if they lived in the U.S. and relatively worse if they lived in Europe) that point was not need to be made. I realize that Buffett also made the same point in 2020 AGM. A better comparison is 2000, because while you had 9/11 etc., one could make the statement that all else being equal (since there were no major geopolitical event) this is what happened when the economy rolled over. So really isolating what we want to focus in. *people complain all the time about Middle East and its politics, but they forget that the region does not have a natural barrier protecting it from the outsiders. It is often easy for people from U.S. and Canada to look down at the rest of the world and wonder why there are so many wars and conflict and look how great we are. Another case in point, Japan and United Kingdoms. Both islands at the far extremes of the Eurasian continent.

Well that was kind of my point. I was not suggesting that gentleman in 1928 (on the eve of Wall Street crash) was thinking, "well, we just have to dollar average, see you in 1954", if something happens. My point was that there is so much stuff happened between 1929 to 1954, it is unthinkable to even suggest that an investor who was invested in 1929 took him till 1954 to be made whole. Which is the point Jeremy made on the interview. That investor could have taken his/her life in 1933 for all we know. Entire nations were destroyed in the world war. That point (about dollar average) though is very valid for 2000 bust and thereafter as society evolved to where we are today.

Dean, i saw that interview as well. But i do recall another interview months later with Bob Iger, where he said, he didnt know what Diller was talking about. (of course he would say that :-)) It is kind of weird how Diller just threw that in.

I listened to the new Jan 2022 interview with Jeremy Grantham (admittingly I had watched his Jan 2021, i think 3 times, in the past year; Yes i am a Jeremy's fan). So I cannot say that I disagree with the things he says. That said, I would disagree with his assertion that in 1929, you would have only made it in 1954. I think that point is irrelevant and it does not belong to this discussion. For one thing that means the investor never invested money again between 1929 and 1954 (possible in a Great Depression, but certainly not after). Furthermore, from 1929 to 1954 you had: a deep global Great Depression, and World War, a complete obliteration of the industrial base in Europe, collapse of the Japanese Empire, creation of atomic bombs and its impact on geopolitical calculus, and establishment of a New World Order centered around Moscow and Washington and defanging of the British Empire. So all bets are off, in terms of what can one predict. And since we cannot predict I think the better example is 2000-2003 where the market rolled over lost half of its value ever 2-3 years with a sandbox of economic cycle. .... and not 1929 apocalyptic scenario and where the world change half dozen times over till "break even" is reached in 1954. You may have already died in 1944. In my view, 1987 could have been a 1929 moment, but it didn't take hold, because the action policy makers took and so many other things that we dont even know about.

Greg, I believe that Bloomberg Front Row interview was done few weeks ago, tidbit of which was released only. And this week additional tidbits are released. I still cannot find his full interview. He did one last year which I thought was pretty good (but early).

I sent this picture to a few friends, telling them that this is Berkshire Hathaway holding the line in a blinding blizzard of a bear market. (not exactly bearish with 10% down but still cool picture)

Cheers! By the way, the movie "Dark Waters" that you recommended last year is finally on Crave TV. Dont know if you remember, finally i will be watching it.

Technically speaking, this is not their mandate. Their mandate is inflation and unemployment (I believe). I think that asset inflation is just a by-product of Greenspanism and his successors.

Maybe that was not the biggest mistake and perhaps it was the biggest pillar of your success. Depending on the way you are/were wired, paying attention too much on the Fed would have had you hedge your entire portfolio. Perma-bears and perma-bulls are eventually both right in the fullness of time. I personally think, unless if you are close to retirement, paying too much attention to the Fed can be a net costly mistake. Six months now, a portion of inflation which was more supply chain driven and not monetary related could be sorting itself out, in which case, it would help Fed, and the picture would change again, ... now with that new data point.

Most people run out of dry powder by the time it gets to 40%, depending how fast is descent. A rapid flash crash of 45% (March 2020) can be timed to a certain degree and deploy capital efficiently. A grueling 45% descent over 2 years with multiple bear traps will sap the investor's spirit dry. Someone with a $1 million portfolio may not have $200,000 cash on standby to deploy, and would feel throwing money into a firepit over the two years period, before his wife leaves him.

I think if everyone would be patient, you get the additional Q4 data point as earning kick-in. Don't think prices is going to run away to the upside, but at least you have more data points to make a better decision, especially for companies who growth trajectories had a Covid-induced step change, so you are lapping Q4 2021, with Q4 2020 and pre-Covid Q4 2019. I own Mercadolibre and saw the lapping take hold in Q3 of last year as % growth in topline just trailed off. Some of these growthier names (SQ, etc.) have crashed through their 200-day-moving-average. If only Prem Watsa was shorting these names at the right time. Poor Prem. He cannot win. Xerxes will always complain.

You guys all miss the dip on Resolute Forest, it is now 7% higher from its lows. Lost your chance.

i am looking at RTX, it barely budged lower. Maybe it will budge when the earning come out (i.e. Aftermarket impact from Omicron etc.) but not much affected in the broad sell off.