Xerxes

Cheers Same here, though I ordered only the second title.

Now a business case in business schools Berkshire Hathaway: Covid-19 and the Great Disconnect | Harvard Business Publishing Education "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Warren Buffet, 1986 Letter to Shareholders. This investment strategy had proven powerful for Berkshire Hathaway, Inc. It had transformed a bad textile company into a diversified investment company, ranked as the 12th largest company in the world in 2019, right behind Apple. It had made Warren Buffet a billionaire and countless of his shareholders millionaires. At the end of 2019, Berkshire's shareholders included Fidelity Investments and the central bank of Norway. The company's stock was considered the number one retirement stock in America. Amid the 2020 coronavirus pandemic, U.S. financial markets crashed at record speed (-35% between February 12 and March 20, 2020), including the biggest single-day drop ever of -12.9% on March 16, 2020, eclipsing the record of October 28, 1929. Expected to be greedy when others are fearful, Buffet was a net seller of stocks and remained on the sideline during that period. His inaction, combined with an unusually cautionary tone at the annual shareholders' meeting, triggered heavy criticisms. Some of his loyalists sold their stocks. As he was approaching his 90th birthday, many started to wonder whether Warren Buffet had changed his time-tested strategy. Was he disconnected from reality? Was he fearful himself?

In the meantime, here is a column on him on The Economist David Swensen, an influential investor, died on May 5th | The Economist

We have been talking about it. Complaining about for about 5 years and now less complaining but more talking about it, but mostly eager to see how FFH will monetize this largely illiquid position. For reference, the RFP share price is back where it was couple of years ago. But it took a once-in-a-hundred years event to bring it back there. That says a lot. Whether this is cyclical or secular, I declare myself largely clueless on the matter. Few facts from RFP: - Net pension liability of $1.44 billion (I hope the asset side of their pension is not funded by lumber) - Net debt at $449 million - OK - cash flow from ops moves from -$49 million in Q1 2020 to +$125 million to $100 million and finally to $158 million in Q4 2020. From Q1 last year to the last quarter in 2020. Total $334 million. Knock out $150 million for capex etc = free cash for $170 million (if lumber prices hold!). Flip it against market cap of $1.5 billion that gives a cash flow yield of 10%. Knock out 3% because you were catching the wave up. That brings it down to 7% cash flow yield, which is not bad, but has a pile of debt + large (net) pension liability. Fine, if one feel adventurous, one can hold 20% of the company and monetize the other 20% into the cycle. But the rationale question to ask is the following given all i mentioned above, and the fact that FFH already took an impairment few years ago, based on THEIR OWN assessment, why keep a big position. I am ok with the rest of your note. But disagree on a RFP thesis play that relied on a once-in-a-hundred years event to bring it back where it was. EDIT: Lastly, 71 million outstanding share of which 30 million are owned by FFH. With a million shares exchanging hands on a daily basis, it will be a long and painful unwind. Specially if the price rallies are on thing volumes. Incidentally, if you have strong views on Atlas, i would like to hear those, i find the company interesting. Is that a roll-up play for you, an undervaluation of the equity. Or just surfing the wave of the global GDP bounce back (which really can be played with any other asset and with lower risk).

It did ,,, last week. It is called Ford F-150.

my 2 cents: i am voracious listeners of business/investing podcasts, but i am not free 24/7 to listen to them as i have a day job. So i listen while driving somewhere or jogging (run about +50-60km per week). Giving my limited time to soak up podcasts but large supply podcast that is only ever increasing, i have felt that since last summer i am listening less and less to some, and building concentration in others. I don't plan it like that, but the market (i.e. my brain) just goes for the most interesting ones as i leave my house for my daily run. On TIP, i am actually enjoy listening to some of the older ones, if i want to look an interview with someone who peaked my interest. On the BTC focus, they should just separate them, because even if the episodes shows up as BTC, it still comes under the same banner. And some people get turned away from potential gems, if it is surrounded on screen with the Bitcoin. People usually make their decision in span 5-10 seconds on what to listen or not listen to. On the pivot itself, it is their business, who am I to complain. They provide a public service (with advertising so maybe not that free), but i am guessing with so much investing/business podcast coming in 2020, they probably have to remain competitive, and Bitcoin is the where eyeballs are (eardrums). But I agree that in a specific episode at TIP, when they were talking about Brookfield, you had Preston judging it by comparing it return to NASDAQ and to crypto by extension. I understand what he is getting at, but this is like me crashing a Bitcoin party, by telling them how Resolute Forest outperformed Bitcoin since March 2020, so we should be talking about lumber and not crypto. Comparing the return of Brookfield to NASDAQ is not correct.

It got a mention on Bloomberg this morning in the latter portion of this interview. Use Commodities to Monetize Inflation, Says Wincrest's Bernard - Bloomberg

Thanks for posting that, the fact that Bitcoin is not re-absorbing the monetary energy (to use Saylor's wording) that it lost to the alt-coins during a crash is telling. US Treasuries are the safe haven (among Japanese yen due carry trade) that rally during an equity market dislocation, as investors flee to liquidity. Even the mighty gold usually drops when the actual dislocation takes place. In the crypto-economy, Bitcoin ought to be the safe haven where these alt-coiners should flee during the dislocation. I was kind of expecting Bitcoin to play that role, I guess it dropped less than others, so maybe still. Though somewhat hard to imagine that a whole host of speculators switching out of Dogecoin into Bitcoin as safe haven, as oppose to the US Dollar. Of all the Bitcoin and crypto supporters that makes the round in the media, the one i have the most respect is Mike Novogratz. His view always resonates with me, perhaps it is his macro-trader background and the fact that he doesn't get Shakespearean like Saylor. I recall few months ago he was shorting the US Treasury as a hedge against a crypto collapse. This is someone who has been around ... yet is a crypto champion and a long term believer. I would like to invest in him company Galaxy Digital (40% cheaper i think now). Than there is Jim Cramer who sold most of his crypto on the top of the market and bought a farm. Happy for him. That is also someone who has been around and has a nose for a trade when he sees it and doesn't get carried away. His 'trade' is a good proxy for how the rest of institutional investors probably saw crypto as well. To get on the trade, lever-up and when the time is right to let go. Lastly, back in 2017, the limited supply narrative of Bitcoin start to be replaced with an actual unlimited supply of crypto-currencies and assets. Same thing is happening now, surely, it takes away from the narrative.

Thanks, based on the above, I guess it depends when you take T0. This is probably such an old holding (and many ways to calculate the return) that no one in Berkshire itself has the overall math starting from the very initial position with all dividends. Agreed on Boeing, in fact I would add that most of Boeing's leadership were Jack Welch's proteges, including the one today (excluding Muilenburg, who was equally as bad as he gave away the house through massive buybacks). The peak of that GE influence though was the McNerney era and the now-famous battle cry of "no more moonshots for Boeing". The seeds of 737MAX derivative were planted right around that time.

At the very high level, does anyone know if overall Berkshire Hathaway had a good return on Wells Fargo since it got involved a decade ago. Does anyone has an overall gauge ? I know they have not been exactly selling it into the rally lately.

OMERS had the ONE job. All OMERS had to do was to clip the 9% coupons from FFH How did the OMERS scored a negative 2.7-per-cent return in 2020, when the juggernaut CPP return 20%. It could be that CPP year ended in March, therefore they are benefitting from calculating the 2020 annual return from a 2020 low in last March. Canada Pension Returns 20.4%, Boosted by Stock Market Recovery - Bloomberg

what's that about LBTYA - Liberty Global Inc. reduced by 80%

I made some good money on Shakespeare here, when I bought MSTR in mid-Dec and sold it north of $1050 several weeks later. Not in anyway close to the well-deserved 30,000% that Rkbabang tag & bagged !

No hope. It's dormant call option with shareholder patience as its only expiry Interesting you mentioned the FANGs. Unrelated to BB and going back to the discussion about the bond portfolio and talks about inflation (temporary or otherwise), it occurs to me at no point in the past 4-5 years have I heard FFH management talk about the impact of deflationary forces unleashed by the rise of the Big Tech' network. It would be more fruitful for them to focus more on that (if they are not already*) as means to try to counter their permanent-inflation-is-overdue thesis as oppose to talk about FANG's lofty valuations, which if i read Globe & Mail article correctly, not so lofty given that Canadian Pacific and CN are making bids at similar earning multiples. I say if they are not already, just because I don't know.

Boasting about catching Exxon when it dividend yield expanded to 10% on the 2020 shareholder meeting, strongly implies buying Exxon direct. "After the March/April crash in the stock market, we could not resist buying Exxon shares at a dividend yield of 10.5%, Canadian banks at an average yield of 6.1% and some other companies like Royal Dutch Shell, Alphabet, FedEx and Helmerich & Payne at very attractive prices. We sold approximately half of them in 2020 for a profit of $212 million or an average gain of 40% on our investment." I looked all the past 5 quarters' 13F; On Q1 2020 it shows FFH buying 155,800 shares of Chevron; but no Exxon. They still hold all of the 155,800 of Chevron. But no sign of Exxon anywhere unless it is being held elsewhere where 13F disclosures doesn't cover. But then again, it is not like it is an international equity. Would it be too farfetched to think that Prem thinks his team bought Exxon, whereas his team actually bought Chevron, and two sides within FFH haven't reconcile yet. Just weird. FAIRFAX FINANCIAL HOLDINGS LTD/ CAN Top 13F Holdings (whalewisdom.com)

Michael Saylor must not very happy. He is the one who pushed Musk into Bitcoin late 2020 and ignited this 2021 rally, and now the whole rally is coming down with Musk’ about face. Saylor is very smart and good marketer. But pushing for Tesla/Musk to go long Bitcoin was a bold move that is now going to end up biting him. Musk is at the end an engineer, always iterating and looking for a solution. Saylor is a marketer and a Bitcoin maximalist. His incentives are clear.

Indeed, I just hope that he didn't buy it from me back in Q1, when I sold my BBs at $24.99 CAD

Soros Bought Up Stocks Linked to Bill Hwang’s Archegos Implosion - Bloomberg

How did Chou got his cost so low for Resolute at $1.26 per share. BRK.A - Berkshire Hathaway CL A 40.83 150 Add 50.00% $272000.00 $40,800,000 ≡ BHC - Bausch Health 24.18 1,558,992 Add 1.30% $15.50 $24,164,000 ≡ WFC - Wells Fargo 6.02 209,542 $28.70 $6,014,000 ≡ RFP - Resolute Forest Products 5.77 4,571,960 $1.26 $5,761,000 ≡ MBI - MBIA Inc. 4.66 652,531 Add 5.33% $7.14 $4,659,000 ≡ JPM - JPMorgan Chase & Co. 3.09 34,275 $90.04 $3,086,000 ≡ GS - Goldman Sachs Group 3.09 20,000 Add 11.11% $154.60 $3,092,000 ≡ C - Citigroup Inc. 2.85 67,695 $42.12 $2,851,000 ≡ DVA - DaVita HealthCare Partners 2.49 32,743 Add 204.78% $76.05 $2,490,000 ≡ BB - BlackBerry Ltd. 2.17 529,040 Add 23.31% $4.10 $2,169,000 ≡ SNY - Sanofi Aventis 0.87 20,000 Buy $43.70 $874,000

Farmer's Edge down a lofty 17% in 1 day. Thank god it is not marked-to-market

13F Q1 An increase on Atlas ? maybe exercising some warrants FAIRFAX FINANCIAL HOLDINGS LTD/ CAN Top 13F Holdings (whalewisdom.com) Fairfax Financial Holdings Ltd Can Top Holdings 13F Filings (holdingschannel.com) I find it interesting that you can neither see Exxon nor Bank of America in the list, yet those two name make it to the conference call and letter to the shareholder. Is that some sort of Marketing on some insignificant position.

I admit that I am not familiar with the 08-09 event with FFH getting a hold of Berkshire-backed municipal bonds and even less familiar with what is a "optimal" surplus ratio. But given some of the missteps they have done in the past few years, I think going in March 2020 on the risk curve with a 7% allocation wasn't totally a bad move.

Negative Oil: When Prices Went Below Zero, These Essex Traders Made Millions - Bloomberg

John, i must say, i was a bit surprised to see you start a position on BAM. I always saw you as sticking with the devil-that-you know-like story (yr long term holding on BRK). That said, glad to see you joining BAM.

It was not risk-free (and could have gone the other way (i.e. prolonged downturn)), but still lower on the risk ladder than adding to equity, but either way as shareholder aren't you paying the management team their annual salary to take risk to take advantage of market dislocation ?