Xerxes

she rocks ! (for now)

Interestingly, I am more than half way through the book "Greatest Trade" that covers Paulson's shorts in 07-09. Say what you will, many people saw the pending doom as well in real-estate, but either were too early, botched the trade or didn't swing for the fences. He was smart enough to nail the shorts in 08-09 and bet big, but not smart enough to see the rise of mega-techs and underperformed in the subsequent decade. it goes to shows how differently investors are wired for different occasions. Sometimes the best of them need to sit tight for years, until they see something that make sense for them, while the peanut gallery roll their eyes and opine. Paulson' comment on gold intrigues me. Bloomberg Wealth interview with Paulson (the full interview) should be posted in the next few days.

Only if Buffett was weird like that (or more often), we could catch BRK at substantial discount now and then. Last time he was weird was in 1999-2000 (before I was following any of this) and he was weird again in 2020. Weird defined as being against the whatever is common wisdom at the time for whatever reason.

I don’t think we will see any buyback (ala FIH tender offer). Not that they cannot do it but with the framework of having certain net cash on balance sheet that means that they cannot borrow the fund to do a large buyback. also buyback (a large one) will re-lever the company as it shrinks the equity base. I think large buybacks will come eventually but will be through excess free cash flow and not at the expense of re-levering the business. I think this clear through *signalling* they have done. The comment about Teledyne few years ago was just Prem looking ahead into the next decade as the business moves from an asset gatherer machine into working value per share. He sent the wrong signal as he didn’t put timetable on it. But I truly believe he means going there. A business that has been sending frequent *signals* about large buyback has been IAC, that has made frequent scripted comment on CNBC, earning calls etc that they had bought half of their shares post-quad split 10 years ago. And surprise surprise the post-Vimeo spin news flow is close to zero with drips, which to me it says they are content with their share price dropping. Who knows maybe they ll buy back ANGI.

fair enough. I am watching this show called “what if” on Disney+. Sometimes it is worth looking at that.

To summarize, (as I see it) we are betting that the business is moving from “empire-building mode” to “harvesting mode” and later as earnings (real earning not paper earning) builds up in some years “to shrink the equity base mode”. We are very much done with the “empire building cycle” stage in the life cycle. There was an intermission (short thesis gone wrong) between that an the next stage, but that is largely over as well. The chairman was obviaouly aware of all the levers he had available to pull when he made the $130 million bet.

Viking. out of curiosity I recall you had said that in 2013 you made a big bet on Apple (after FFH got into BB) and did really well. did you ever back-calculated your %, say today, had you held whatever you had in Apple and completely untouched.

Viking you will probably find this interesting. There is a podcast called YAVB with an episodes on lumber. Interestingly there are lots of references to Paul Rivett and Resolute. you will probably enjoy it Was listening to it on and off while on a flight to Vancouver (so far an interesting city).

Cheers I had to google YDRC

IIRC Repurchase of shares (when above BV) will push down the BVPS Repurchase of shares (when below BV) will push up the BVPS Of course, repurchase of shares above or below intrinsic value has no bearing on the accounting.

Cash is cash in my opinion. Whether it is conventional dividend or return of capital special-like dividend, the dividend cash flows. I am personally not too much concern about their different accounting treatment. That being said, while I am all about FFH building businesses or financing them, i don't care that much about the recent growth of dividend stream they receive, because from my perspective they are just moving on the risk-curve for that extra juice. This is not Berkshire investing in an income-machine like Coca Cola and letting that dividend to growth. But nor it should be, I guess, so I wouldn't put to much stock on the dividend growth attribute nor would I window dress it. If it is there, it is just a bonus. The elusive premium to BV that everyone dreams about requires Berkshire-like quality level investment, otherwise it wont be a "sticky" premium. Nor should it be, after all, if as per FFH management own comment "results will be lumpy" statement is truth, so will premium on the BV be "lumpy" too.

I am just reading this after many years of holding unto it. I am one-third through. It is a great book on the history of the family, the city of Turin and the company. Wish i had it read it many years ago.

One could say that Michael Dell was a value investor first, then maybe a SOB ....

Gregmal, For a moment forget about Prem, out of curiosity, what are your thoughts about Sokol's new outfit: Atlas.

Deal Of The Century: How Michael Dell Turned His Declining PC Business Into A $40 Billion Windfall (forbes.com)

You are not redundant, but people have different ways to manage their portfolio. Some of us (i.e. myself), did not meaningfully owned FFH prior to Covid, so we don't carry any bias. I think north of 65% of my FFH share-count has been bought post-Covid and at a good discount, yet it doesnt make it to the top 3 position. Buying FFH and discussing it doesn't mean that we do not have anything else or do anything else. I was happy to buy Microstrategy @ $380 ish in Dec 2020 and dump it for $1050 some weeks later. I was happy to sell BB @ $25 CAD in Jan (cost being in mid-single digit). I was happy to dump Uber at north of $55 in Q1 and with it good third of LSPD. FFH creates discussion (and controversy) so people tend to post a lot, but (except for a few) i think the quantity of FFH posts are NOT correlated to the % size of it in their portfolio. Perhaps this could be a good survey, to see how many people actually have a large outsize position in FFH. I think that has more merit than the content of FFH bull's numerous posts, which is well discussed. As point of reference on a different name, I bought BEP.UN and BIP.UN exactly at about the sametime: during the market swoon of mid/late Dec 2018. BEP.UN has been an homerun of a sort, while BIP.UN has not done much, and i am sure we can write a PhD thesis on Brookfield's arrogance and their dealing with minority interest and its complexity, yet that does't make that entity a bad hold.

resilience of the BRK machine even with all this !! To be fair that basket of so-so investments in the last decade were more than offset by the Apple homerun in the same period. So net +ve. That said, i somewhat believe the post-Covid canvas-pivot theory.

On the comments about share repurchase at these high absolute dollar levels comments, perhaps what the Omaha team has in mind, is not so much cost dollar value in any given month or quarter, but rather the aggregate average dollar cost of all the repurchases in the past say 20 months or so. So, yes they are buying at $270 ish, but what is the average cost of all the buys since the start of 2020 (maybe that is at $240 per share), I do not think you will see that moving average creeps up to $270, which means slowing share re-purchases going forward to not let the moving average cost creep up. Said differently, in my view, he is more concerned about the volume of stock that he is retiring with a given average cost as a target, than just shoving money quarter after quarter as 100% payout ratio.

There is a possible future out there where the outcome of the Hilton purchase and Sam Zell's REIT would have had a completely different outcome. It did not. Both were spectacular successes and now seared into the Blackstone folklore and investing legend. Investing comes with mistakes and I am sure BX did its share even with its watch-the-downside DNA, it just didn't have a needle moving mistake before reaching critical mass. They are now achieved escaped velocity and can throw their weight around. My point, in my original post, however was not that BX made a mistake and therefore its stock was in doldrum for 10 years. My point was that its business was not recognized or given credit and therefore its stock was in doldrum for 10 years. Rubenstein from Carlyle talked about this as well on a recent podcast, how PEs had to balance public shareholders and fund investors. The former wants recurring earnings, the latter wants the carry to incentives the PE. Faithful, like yourself, that stuck with it did really well, when the market give credit for the recurring earning.

Greg I give full credit to Ackman for his pivot post-Valeant. Not just cutting a getting-smaller position that was consuming 80% of his time, but also for not doing that again. He became the 'activist' on himself. I am all about dumping BB/RFP (am #1 poster here complaining about it), but at the end i can only complain. The two positions that are getting smaller and smaller.

Folks, have a look at Blackstone or Microstrategy. Who wanted to own Microstrategy in 2016 ? i am not saying it is gold now, but like it or not its CEO did something revolutionary and outside the box that brought it a whole host of new investors. Who wanted to own Blackstone in 2014 or 2016. Now that has done the hockystick, everyone cannot stop raving about the genius of Steve Schwartzman and Jon Grey. There was a time, where the conventional wisdom was, you do not want to own the private equity business as a public shareholder, but where you wanted to be is to be invested into their funds. The only caveat is, you cannot time it, and the founder/CEO/operator is not going to do it on your timetable. He/she is not there to serve the traders, looking to do a flip. Because they are not there to do a flip in 6 months on their life achievements.

Agree, In fact Resolute and BB are more about optics: The legacy of the Lost Decade. As a reference point, in 2012, the investment portfolio was $25.163 billion page2 (q4cdn.com) And it was $42.108 billion in 2020. 21zai18401 (q4cdn.com) I don't know the exact position sizes then and now, but say both combined were less than $1.5-2 billion and has gone flat for 9-10 years. Their % contribution dropped as the overall pie just got much bigger, and as the two names moved sideways. We collectively maybe attributing too much to those two names, because of what they represent. But that is to our detriment as the canvas has evolved to something else, and we might be missing the bigger picture. I bet Prem Watsa is going to have the last laugh .... but we can laugh with him too.

No worries, i was just poking

Come on guys, Canada is not just made of Ontario and BC etc and the in-betweens. Monday was not a holiday in Quebec where I reside.

For now only accounting change.