wescobrk

I haven't been on here for a few weeks. Has anyone posted any bond investing ideas? The Fed isn't making this easy. AAA bonds a year out are yielding around 5 basis points. Even BBB I think are maybe 2% for a year out.

According to Buffett, it isn't trading at a discount to intrinsic value. He didn't buy any in March when it was cheaper than what it is now. If Buffett showed signs of dementia at the 2020 annual meeting, then it would be easy to dismiss him, but he was as sharp as he has been the last 10 years. I think Buffett knows more about intrinsic value for Berkshire than anyone else. I don't mean for that to come across as a criticism of your post, just that the man that created Berkshire and knows more about the company than anyone on the planet disagrees with you.

Anyone on the board recall how many companies Buffett put more than 20% of the partnership in? I need to reread the letters. American Express is an obvious one. Berkshire I'm guessing but not sure about that. Blue Chips? Diversified Retailing? I know Dempster was one and I'm pretty sure Sanborne Maps was another. So, maybe 5x out of his 13 year track record?

Oh, I haven't read the board for the past few days. I need to get caught up! Is there general sense on this board the market is overvalued or closer to fairly valued?

Yes indeed, well covered here and elsewhere. Also his net worth is not over $500 million. At his day-trading high he was claiming $118m or something like that. Not that it matters (to me - it obviously matters to him quite a bit). I stand corrected regarding net worth. I read he made $450 million selling barstools or whatever it is. He is being smart only investing $5 million out of his $118/450million (Portnoy) I don't see how this guy doesn't lose more than 50% of his money.

Some frat guy (that is worth over $500 million) slams Buffett for being washed up, Ackman said he is more nimble (which is true since he manages less than 10% of Buffett in assets) and the retail investors bidding up bankrupt stocks by 600% and bankrupt stocks (hertz) being approved by the bankruptcy court to issue $1 billion in shares while Icahn sold his 40% stake at 70 cents a share, does anyone else feel like this is a Lewis Carroll story?

When the "stimulus" package was passed I posted about why would people go back to work making minimum wage when they can stay home and collect more money at home and watch Netflix. Pelosi said she didn't have any concerns about this and it wouldn't delay people going back to work. This economist says that the bottom 5th of workers make twice as much with this new stimulus bill than going back to work. This will delay people going back to work. Unemployment could be at 7-10% for the next few years without a very robust vaccine. pretty fascinating how many permanent changes will come from this such as permanent remote workers being announced at Spotify, Facebook, Twitter and others. Finally the medical industry will be more efficient. Why the fuck are people driving to a medical office to get a refill on their prescription or ask a question to their dr when they can just do a zoom video? This will finally make the medical industry part of the 21st century.

yeah, was going to say to just look at Japan. The test will be if the Fed is able to take the foot off the gas with the market not throwing another taper tantrum that kept QE going on seemingly indefinitely. Que the 80's song "we are turning Japanese now"

That seems the likely stopping point (vaccine). I think they have already expanded their balance sheet by 2-3 trillion since March so if a vaccine happens in summer of 2021 and able to be mass produced then I suppose we are looking at a Fed Balance Sheet of another 12-15 trillion or about 110-120% of GDP.

If inflation ever exceeds 2.5% that would the point of them stopping (or at least reducing a lot) and that is when the capital markets will behave violently. Jay Powell is doing a hell of a job as far as keeping the markets flowing.

Anyone want to chime in about how long the Fed can continue expanding their balance sheet at this rate until the capital markets start to go south? The Fed says they don't have a limit. This is pretty fascinating stuff as far as how long their buying everything (including junk bonds even buying etfs) even talk of buying equities at some point. I think their balance sheet is up to about $7 trillion. So the Fed's balance sheet is about 1/3rd of GDP. I'm not sophisticated enough around macro economics as far as what point the capital markets will no longer be propped up. 50%? 100% 200%?

Another proclamation from him the market is overvalued. I guess he just likes to talk to the media to keep his name out there. https://www.cnbc.com/2020/05/18/oaktrees-howard-marks-thinks-the-market-comeback-has-gone-too-far.html

Buffett raising all of this capital has nothing to do with insurance claims. The CEO of Lloyds of London thinks there will be about $100 billion of claims for the virus and maybe another $100 billion if you take into account insurance companies having to sell assets at low prices. If we take the high end of his prediction, in the past, Buffett has said Berkshire will have no further damage than 3% of the industry. Let's double that on the high end prediction of $200 billion which is 6% of $200 billion is $12 billion. Buffett further says he wants to have $20 billion at all times. $137 billion minus 32 billion equals $105 billion of dry powder AND he is continuing to sell stocks such as Goldman, JP, BK. His comments about having to pay claims for people and others that have 99% of their net worth in Berkshire strikes me as complete bullshit. I love Buffett but as someone as said on this board watch his actions and not his comments. Buffett is speculating there will be a monster drop in equites . He wasn't buying at 35% drop. He thinks we will drop 50% plus. That is what I'm getting from his actions and ignoring his comments.

He sold all of the airlines now he is selling Goldman and JP Morgan.

I'm wondering what was the information that Buffett changed his view (almost a 180 degree change) from his late Feb interview on CNBC when he sounded like every other interview for the last decade to his very cautious view at the AGM. He told Becky that he spoke to his science advisor Bill Gates that he is bullish on a vaccine over the long term. He talked about buying stocks in the quarter. It was a radical change based on the same pandemic that he was aware of and had spoken to Gates over a roughly 6 week time frame.

Bingo, he just said it, the discount isn't wide enough now at these prices as they were 3 and 6 months ago.

The only rational explanation is the uncertainty that he referenced due to the covid 19. But, at other times, he talks about the you can't stop America and Berkshire will come out stronger, so he seems a bit contradictory at times, but my guess is that now that he knows about Covid 19, his margin of safety now is wider for Berkshire and any other marketable security.

Buffett has been talking for an hour straight so far. Very Lucid. He seems the same as usual. Still brilliant. :) Loomis I'm hoping is wrong about it being a lot shorter this time. Buffett hasn't even gotten to the Q&A yet. Should last, I'm guessing, about 3 hours. Not bad to hear from Buffett for 3 hours.

He bought more last quarter when he commented Berkshire wasn't that cheap (I believe a 95 cent dollar?) This was worse than I thought regarding taking advantage of the drop. Well, when there is a 2nd wave, hopefully he will be more aggressive. I wonder if Ted and the other chap was aggressive.

Senator Warren and Congresswoman AOC are trying to push legislation to ban all M&A until pandemic is over. M&A is already down over 33%. The FTC is still reviewing each M&A case. The FTC commissioner commented that is black and white thinking and would actually be more difficult for some small companies. With poison pills so easy to invoke, small companies aren't forced to be sold unless the shareholders vote on it. Also, if a company is struggling and may not make it without an acquisition, this would harm companies. I don't even understand how Warren and AOC would benefit from this politically as this seems to be difficult to describe the specifics with voters. Anyone on the board believe this is a good idea and can explain why it should be law until a vaccine?

I still don't understand why Warren and Charlie and Ajit just dial in from home and have an audio meeting along with the other directors.

If it takes 2 years (vaccine)as Bill Gates said "1-2 years" then it appears we may not have another annual meeting with him and Charlie until 2022, if ever, sadly, due to their age. I hope they both live to 2022.

it isn't a safety issue. Charlie and Agit can talk over the phone. Very disappointing. I guess the Jason Zweig interview of Charlie from a couple of weeks ago is all we are going to get this year unless something changes.

Agreed, not even having Charlie and Ajit on speaker phone? Wtf?

Wow, no Ajit either. Very strange.