Munger_Disciple

No, but LBRDK is down almost 20% in the last few weeks and Charter is down is a lot too. Plus both are down > 50% from their all time highs in August 2021. They are good tax loss selling candidates for longer term holders who have gains elsewhere in their portfolio like the big tech names.

CHTR, LBRDK

@Charlie Others have responded to your question already but in essence your understanding is correct. I would add that in the US if the estate is below a certain exclusion threshold (roughly $28mm for a married couple), there is no estate tax at the federal level. Whether estate tax is paid or not, the heirs of the estate get a step up in basis.

I agree with you @John Hjorth & @73 Reds about deferred taxes being a zero cost float that is very much accretive to investor returns. The only negative is that one must be sure that the company is "bullet proof" which BRK passes with flying colors. I would add that your heirs will get a step-up in basis when your estate is settled in the US, so they wouldn't owe any taxes on gains up to that point. In other words, deferred taxes become zero taxes at that point. It won't help you very much but it will help your heirs.

Unlike you, I take Buffett's word for it. Let's just leave it at that.

I can assure you Buffett knows the difference between resulting and a poor decision. The reality was that he misjudged how horribly GenRe's underwriting had deteriorated in the years leading up to Berkshire's acquisition of GenRe in 1998. You should read BRK reports from 1999-2006. GenRe almost certainly would have gone bankrupt w/o the deal with BRK.

agree that GenRe was not a good deal. Buffett said this in the 2016 Annual Report about the GenRe deal: Unfortunately, I followed the GEICO purchase by foolishly using Berkshire stock – a boatload of stock – to buy General Reinsurance in late 1998. After some early problems, General Re has become a fine insurance operation that we prize. It was, nevertheless, a terrible mistake on my part to issue 272,200 shares of Berkshire in buying General Re, an act that increased our outstanding shares by a whopping 21.8%. My error caused Berkshire shareholders to give far more than they received (a practice that – despite the Biblical endorsement – is far from blessed when you are buying businesses).

I don't think Hussman is a good investor but his writings are interesting.

John Hussman's op-ed in FT: https://www.ft.com/content/abec3526-32ae-493e-bf59-2d30ccb4e50f

At this point stock trading at 4x BV is purely hypothetical. We are discussing such a what if scenario only because @SafetyinNumbers brought it up. I think it is crazy to root for a highly overvalued stock (I think he even brought up 6x BV) especially if you are a long term shareholder still in accumulation mode. Having said that, I won't be unhappy if FFH trades at 4x or 6x BV. I would definitely cash out 100% of my shares at those prices. I prefer though for it to trade in a reasonable range relative to its BV, with the growth in share price mainly resulting from organic growth in BV, especially now that the stock trades at close to 1.4x BV.

As I said, you are welcome to think what you want but I remain unconvinced.

Well, I think you are wrong. BRK made lemonade out of a lemon. It's not a great deal. Just go and look at the GenRe results post acquisition for the following 5 years or so.

They have to stick the overvalued stock to someone, whether it is the company they want to acquire or their own public stockholders. All this crazy stuff is based on greater fool theory. That's why Buffett repeatedly said he would rather see BRK stock price trade within shouting distance of intrinsic value, not at an overvalued price. I would rather FFH create intrinsic value growth thru' operational excellence.

Not for a long time. It wasn't a great deal for Berkshire (despite the fact that they were using overvalued stock) and Buffett even wrote about it in later annual reports. Berkshire inherited a lot of GenRe problems and had to replace management to fix it. GenRe would have blown up w/o Berkshire deal from 9/11 exposure and derivative bets.

Because there is inherent risk in an (overvalued) stock deal between the time deal is struck and the time deal closes. If I were seller to a company with overvalued stock, I would insist on cash payment or a stock deal with a put option.