RiskAdjReturn

nitpicking? intent, stock pick today with 5 yr scorecard.

the 5 yrs is really for me to flush out your best MOIC idea at end of yr 5. ie 1.5x, 2x, etc. I'm not interested in "market timing" a 2024 calendar pop. I want to award the medal 5 years from now, see who is swimming with clothes on then

fair enough. let me rephrase it, this isn't proving who is good investor. that said, would love to see everyone's best single idea for 5 yr "race"...to see where they have real conviction at the margin . alot of folks portfolios have alot to do with embedded unrealized gains they aren't willing to pay taxes on, rather than marginal "Rebuy" conviction.

Taking into consideration entry price (ie great company and future might not mean great stock): If you are running endowment or childrens trust: you have 1 stock to buy today to prove, 5 yrs out, how good an investor you are, what would it be? I'd like to see folks best idea, risk adjusted (I toggle between credit and equity....I'm allergic to losing capital permanently): we can then dredge up this thread each yr until yr 5 and see the winner. we aren't looking for shiny objects here...but endowment growth! I benefit greatly from many of you you (some I think miss the boat on concentration though :>) ), and would love to add people and ideas to list. one qualification: goal is to outperform SP500. consider this endowment would already be indexing money, this is active, 1 stock best idea risk-adjusted (sort redundant to say risk adjusted when its a 5 yr call as no one wants to lag bonds/cash, etc with a bad bet

curious how much you invested / saved into the taxable account, vs the starting point balance you reference. curious the compounding effect vs contributions. this is great lesson for my kids

can some tell me book value per share (in B term). so can see P/B mult against todays' trading level i hate how this metric is shown anywhere

would love it if those who follow the name closely could try to calibrate where they thing NAV would be, here, today on May 21....unless a CEF, I can't easily tracke the premium to book for Berk. but feel like I need a refresh during the big selloff and of course AAPL fall.

thanks...did you mean to say 2025 ? or 2022

for my benefit, whats the elevator pitch on Safran?

I hear ya. Kinda like the margin idea here to get liquidity in lieu of selling berk (given the diversity/ballast nature)....what's your % advance max against your position that you used as a guardrail? ie whats % of berk holding would you "access" for personal liquidity without feeling aggressive

Thanks for clarification on it being after tax thats good on the mulitple... I am not familiar enough with the earnings stability/cyclicality of rail, though I see your UNP comp mid 20s. So yeah that gets you your 2.4x ish. I take it the earnings power is very stable, repeatable, and has growth trajectory, to trade over 4 percent FCF yield ( unp)

pupil, good stuff. BHE is a blackbox to me. unclear if that is, fundamentally, a good or great business. regulated, with cost recovery, constant churning of capex, etc. who knows. the cash flows / earnings don't really jump out and wow me, net of all the capex that is plowed in. let's focus on rail for a second: first, I think we need to tax-affect the $6 of "Earnings" don't we?. but before doing that...$6 on 46B of book. that's 13% ROE. let say capex and depreciation wash, such that earnings = FCF. unclear if that is really good assumption though. capex required to "run in place" may be higher than depreciation. Just saying, cash flow don't lie. thats a 13% ROE on book. if tax affected, you are closer to 10%. sure some premium to book may be warranted, but this isn't a high ROIC business.

thanks...yeah that's an interesting thought process on the accrued taxes. I prefer backing it out fully but that's the credit investor in me. I see it as no different than long term debt, etc. because at end of day, I want to know that the asset value I'm buying, has a {xx] embedded tax bill. its just a question of NAV purity for me, and from there I can do my puts and takes. its of course pretty inefficient to own stocks in a c-corp for public investors, so I want to be intellectually honest about the fundamental reality of it

thanks pupil, you are tracking my argument at least. first: to some in this thread: for a big chunk of asset value here, at fmv, you are paying 1.4x that "nav" or "book" , whatever term you prefer. in the US, one buys a mutual fund, or etf, or stock, at "1x nav"......for Berk's same apples, one is paying 1.4x then the focus shifts to how much "juice" or suppressed value there is on the operating assets side of house, which are you paying 1.4x accounting book for, to help compensate paying 1.4x for berk's securities and cash. the math is the math, dispassionate, objectve, etc. pupil.....come agin on the aapl 84%? in my mind, the gross fmv for apple and of course offset by the accrued taxable gain liability on books. but that is still 1x aaple in the nav nav captures the tax liability) on the operating assets side....I still maintain, prima facie, that if the operating earnings, relative to Berk's operating asset book capital (bnsf, bhe, etc) isn't attractively high ROE then the "juice" isn't most most think, unless earnings power is suppressed in gaap earnings relative to intrinsic value, in some unique way vs other companies. value of float: how much can I make on $140B a year, with regulatory on restrictions of usage (stocks/cash etc). let's say 4% after tax which is me being nice in today's interest rate environment. that's $5.6 Billion of earnings from the "free float business".....put that in div discount model, at say 6% discount rate. that's $93B of value that is hidden and should be added to Berk. I concede this. (one can play with assumptions) I appreciate the conversation, thanks all.

lol. no. go think about it some more :>)