Munger_Disciple

kiltacular, Thanks for posting the link. This video made my day. Charlie's mind is amazing.

dcollon, Thanks for your offer to post notes from Munger's talk. Given the time lag in posting the video at U of M, your notes will be very valuable.

In the book Snowball, Alice Schroeder refers to a paper written by Warren Buffett in 1967 titled "Thoughts Regarding Capital Requirements for Insurance Companies". Have anyone on this board have access to this paper? If so, please post it. Thanks in advance.

Buffett also seems to be hedging on the timing of when he may bring in one or more outsiders to manage Berkshire funds.

From my reading of the WSJ article, Buffett while praising Li Lu, seems to be hedging his bets regarding the choice of future Berkshire investment managers. Munger on the other hand seems to imply that Li Lu'0s appointment is almost a done deal. Anyone else thinks this is curious?

In general, it is prudent to avoid margin debt. Even though the current margin rates are low, the brokerages can change the margin requirements in addition to margin rates at any time of their choosing w/o warning the customer. These events tend to happen when there is general distress in the markets (for ex. Q4-2008), so it could come at a particularly inauspicious time for the investor. My suggestion to Myth465 would be to choose option 1.

Thanks for the link.

Does anyone have a copy of the goldman report?

Any comments from board members on the CFO change announced on June 4 by Fairfax? It seems strange.

Most of the "full service" brokers provide "full" service to themselves and the institutions they work for at the expense of the customer. They are basically glorified used car salesmen and get paid to shaft their customers. Aren't these the same folks who sold auction rate securities to their customers as an alternative to cash? Fire the "full service" broker as soon as possible and save yourself a lot of money and useless advice.

Just to clarify my comment, I respect Mohnish's accomplishments. However in these checklist talks, all he seems to be doing is state the obvious: learn from your and other mistakes and reduce the number of future mistakes.

Is it just me or are there other board members who find Mohnish's insights to be rather pedestrian, and not very deep?

Any notes of the meeting?

I meant estimated growth rate over the next decade in my previous post. Sorry for the confusion.

Mpauls, Nice report. One suggestion is to add an estimated rate of growth in BV (or better yet IV) of Berkshire over the decade with some supporting evidence behind the prediction. Of course this number will vary from analyst to analyst.

Ericopoly, What is your current profession and is it easy to practice it in Australia if you decide to move there? From your discussion, Australia seems like an interesting place. I am a bit worried that it may follow the US path in the not too distant future just as the US seems to be following a European social welfare model with a lag.

It is obvious what the difference between value investing and buy-and-hold is. I highly doubt anyone (including me) on this board misunderstands the difference (one is related to buying securities at a discount to their business value, the other is related to holding period). Ben Graham paid a huge amount of attention to the balance sheet of the enterprise which does not appear to the case at least with some of Pabrai's investments.

How about Pinnacle Airlines, Harvest Natural resources, Berkshire (he calls it a cash substitute? why?), in and out of Fairfax, Cresud, Sears, Cryptologic, Horsehead Holdings, etc, etc.... ? One of his picks Delta financial went to zero.

The other thing that is weird about Pabrai is that he talks about Buffett-Munger principles, but acts totally differently. I am not impressed with his portfolio holdings in terms of quality. He also seems more like a short term trader (darting in and out of positions quite regularly) than a true value investor.

Ericopoly, I am originally from India and am a naturalized US citizen now. Like many on this board, I am also of the opinion that the US is on the wrong track. I came to the US as a 21 year old graduate student and since then noticed the increase in the entitlement mentality of the US population in the 23 years I have been here. I have never been to Australia and am wondering if they are still a free market capitalist society or also moving in the wrong direction like the US. It appears you travel there frequently, so your thoughts would be helpful.

I understand; that is my plan. I guess Florida, Nevada, Texas, Washington, NH are the options.

I currently live in CA (the state tax is ridiculously high), and thinking along the lines of Ericoploy's post, I hope to establish residency via a second home in a zero tax state in the future.

I would like to understand better why utilities/BNI are such a good investment for Berkshire (beyond the standard argument of zero cost float generating a fair return). Specifically what type of return on capital are they currently generating and what they are expected to generate in the future. For example, I don't understand why Buffett has not loaded up on stuff like KO, WFC and in stead opted to buy another utility (BNI). The stated reason of course is that he likes BNI because it can use capital that insurance sub generates.

I agree with this and thanks to everyone for the excellent discussion on Roth & regular IRAs. It certainly clarified my own thinking on this matter.

In effect the scenario Ericopoly is considering is not Roth conversion, but an additional contribution equal to the tax due. If that is the case, for correct comparison, one should consider the case of potentially making an equivalent contribution to a regular IRA if possible. Then the two cases are equivalent. If such a regular IRA contribution is not possible (due to limitation on the size), Roth is potentially better if tax laws do not change in the future to make Roth withdrawals taxable.