Munger_Disciple

I think Buffett is a great teacher, phenomenal business leader, one of the greatest investors of all time, and a great philanthropist. I find him to be an inspiring teacher who has an amazing ability to simplify seemingly difficult concepts for his audience to understand. He is also a decent, honest and trust worthy (managing) partner. A great American treasure. His painting Berkshire is likely to last a long time.

Speaking of PE, Dan Rasmussen (smart guy) points out major problems with the industry in this interview FWIW:

I wonder if WB & CM soured on banks too in addition to airlines given that NIM will be in the toilet for a very long time. We know they sold a slug of Bank of NY, and probably continue to sell WFC.

I think they are not required to until 2021.

No. An amended 13G is only filed once a year. Berkshire filed the 2020 amendment in Feb and they are not required file another until 2021.

https://www.bloomberg.com/news/articles/2020-04-03/u-s-airlines-apply-for-government-aid-with-sales-in-freefall?srnd=premium

+1 Berkshire owned >10% of both the airlines, so they had to report transactions immediately. Now that they are below 10% of each, they no longer have to. For all we know, Buffett could keep selling and be out completely in the coming days. We wouldn't know if that is the case until Aug 15th when the Q2-2020 13-F comes out.

Berkshire selling Delta & Southwest: https://www.sec.gov/Archives/edgar/data/27904/000120919120023250/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/92380/000120919120023268/xslF345X03/doc4.xml That was a quick roundtrip!

Sad to see Bill G leave the board. Perhaps Berkshire can now buy back stock from Gates Foundation w/o any insider conflict of interest issues.

When BV was the metric until recently, Buffett used to discuss the performance of Berkshire BV change vs. S&P 500. It seems odd that the 2019 annual letter never mentioned Berkshire's stock performance which is now the new preferred metric and its comparison to the index at least in a long term sense and future expectations for the performance.

+1

gfp, Wells Fargo sold the transfer agency business to Equiniti. As a result, EQ Shareowner Services is now the transfer agent and registrar for Berkshire common stock. https://www.berkshirehathaway.com/2018ar/2018ar.pdf (page A-3) -MD

Thanks ebdem! I especially enjoyed the Q&A.

Good points. Not a big deal, but minor correction: S&P 500 TR for 2019 was 31.49%.

https://www.bloomberg.com/opinion/articles/2019-12-23/warren-buffett-s-new-year-s-resolution?srnd=premium Good opinion piece by Tara Lachapelle

I am sure Combs is a very capable guy and wish him great success at his new gig. It is however a bit worrying that a significant division like GEICO doesn't have an internal candidate for CEO job. Or perhaps Ajit is not too happy with the bench @GEICO, so he is willing to take a gamble on Combs who probably reminds him of himself in 1985. Naturally being CEO of 40,000 people at GEICO is quite different from being an investment manager; time will tell if this is a good move.

Perhaps you are confusing supply/demand for an asset with net outflows and inflows? If there is a huge demand for business equity then the price people are willing to pay goes up. But it is still a zero sum transaction (ignoring trading fees) because for every buyer there is a seller. Same dynamic exists for currency trades. The exceptions are when a company issues additional shares or buys back existing shares. Bogle was right.

We shall agree to disagree. I don't think your extreme example makes any difference. All that happened is that you transferred $1M to someone else so the net inflows are zero. Just as a thought experiment, let us say that in your "extreme" example, you sold your stock for $1 to someone else the day after you bought for $1M. So now we are supposed to think there are massive outflows the next day after having massive inflows the previous day? I don't think so.

Seems neutral to me. In your example when you buy stock for $1000 you sent $1000 to someone else. Your inflow to the market is balanced by the outflow to counter-party. The same thing in reverse happens when you sell for $900. I don't see why supply/demand for a certain stock affects the net inflows or outflows. In private markets (for example) such as real estate, you could have a freeze in the market (similar to very wide blown out bid/ask spreads in public markets) with very few transactions taking place as we had in 2007-2011. Even in that scenario, outflows = inflows = approximately $0.

If you redeem a mutual fund shares and there is no offsetting inflow and no cash buffer at the fund, the mutual fund sells the underlying portfolio stock to raise cash to satisfy the redemption. So there is no net outflow out of equities because (as others pointed out) for every seller there is a buyer unless a company bought back shares and retired them.

A truly great man! Best example of a no-nonsense, competent and dedicated public servant and a patriot. May he rest in peace.

+1 Excellent post. The only argument I would have against JPM is that Berkshire already has a big exposure to banks. However you are 100% right about buybacks (or the lack thereof). Just the whole buyback drama (announcing a P/B threshold, upping it & then finally getting rid of it) is poorly executed in my opinion.

I just started reading Zuckerman's book. So far very interesting. There is a table in the appendix showing Medallion fund results & they are stunning. Medallion however is not the only fund Rentech manages. I have the following comments on Rentech performance: 1. The first 10 years of Rentech results (1977-1987) which were not so good were ignored in the performance table (this table starts in 1988). 2. Medallion fund is an internal fund. Only founders & employees can invest in it and no outsiders are allowed. They use it as an incentive to hire talent. From the book it looks like Simons kicked out investors and even friends out of this fund. So Rentech's best ideas go to this fund. Given that they don't manage outside money in Medallion, I don't understand why Medallion has massive fees. Who is earning these fees? 3. In addition to the $10B Medallion fund, Rentech also manages $55B for outside investors and no performance data for these funds is shown in the book. One has to look at the aggregate performance of all assets under management, not just a portion of it to get a better picture of Rentech capabilities. I heard that the results of the outside money are not that good (perhaps someone more knowledgeable can comment on this), certainly not as good as the Medallion results. 4. If I recall correctly, Zuckerman said in an interview Medallion is levered 10 times?

Diller was laughing his a$$ off when Andrew asked him about Stankey & ATT's HBO Max announcement. He thinks it is doomed and I agree.

You are welcome!