HeadOfLeverage
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Posts posted by HeadOfLeverage
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Selling the index put options. Blue Chip Stamps. Buffalo News. Illinois National Bank.
However, I wouldn't really view BRK as just a series of investments. I think his decisions in the operating companies are underrated. In insurance, where they historically had some very impressive result streaks, when the growth/decline in volume was almost perfectly timed to the combined ratio. Also, milking the stagnant businesses and redirecting the cash instead of investing in something stupid like most public companies do. -
I fully agree except at the end when he stated that energy could 5x from 5% to 25% of the S&P500 seems somewhat promotional to me
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23 hours ago, maxthetrade said:
In 2000 BRK traded down to about BV. Most recent BV was $230, so it's not there yet but certainly on the cheaper side.
The gap between BV and and intrinsic value has increased significantly since 2000 and will continue to do so when retiring shares above BV. -
14 hours ago, Parsad said:
Fairfax has almost 90% of its portfolio in cash or bonds maturing in less than 3 years. Berkshire has over 50% of its assets in equities. If the market turns up from here, then Berkshire will do better. If the market has further to fall, which is likely based on further expected rate increases, then Fairfax will be far better positioned. So it's a coin toss, but the odds are in FFH's favor right now.
Most insurers are going to get the crap kicked out of them from bond losses due to rate increases. Fairfax is best positioned to deal with that, as well as put money to work as rates rise and markets fall. We also already know that Fairfax does well when other insurers are getting beaten from catastrophe losses, as premium pricing only gets better after such events, and Fairfax reserves better than 90% of insurers. Cheers!
I think one factor is that if a recession would be deep and long, the generation of new cash at BRK will be very strong compared to most companies due to BHE and BNSF. You can't only take the current balance sheet split into consideration. -
A "typical" recession / slow down is the climate that BRK should thrive in. If that's what we'll see, I have no idea about.
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Had a quick look at the German positions, they feel similar to Verizon as an alternative to cash/bonds, possibly with some tailwinds from a hardening insurance market and shortages in chemicals.
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I think JT is the best bet. They have some unsuccessful snus and nicotine pouch brands in Scandinavia but it's so small that they might be willing to give it up if the regulators don't like it.
If I remember correctly they have historically paid up when acquiring some of their international cigarette brands (covered in the Going down tobacco road book which I recommend). Japanese management in general is also not known for their captital allocation discipline, so if they like the strategic rationale I think they could talk themselves into it. The problem is that they aren't as big as PM, but with a stock + cash deal it could be possible.The second best bet is probably non-strategics as you are mentioning.
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The $15B mentioned in the article is just referred to as a typical premium, they don't have any insight into the actual price discussed. That said, the SWMA owner list is more or less faceless so wouldn't be too surprised if they are able to steal it.
I don't agree with the PM stock being adversely impacted due to the war. PM and SWMA are valued similarly right now and have similar capital intensity but SWMA are growing about twice as fast, have a longer runway and better currency exposures. -
Yeah I don't understand why they switched to CNBC. Thank you @Stuart D!
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Anyone with a link to the full replay?
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20 hours ago, ValueMaven said:
The deal isnt pricey at all imho. Not sure what he is looking at?!
It's quite price to pay a premium to book for a business which generally haven't been able to reach 10%+ ROE imo. But with the assumption of moving the bonds into equities over time it looks like a bargain. Not sure how aggressive you should be there given how long BRK's cash pile has been laying around. -
14 minutes ago, LearningMachine said:
Our memories are not as reliable as the transcripts are :-). Here is what Buffett said exactly:
In other words, what he said was that he is not going to put $50 billion into something like that :-). I doubt it includes Verizon as he understands that business well as he had the confidence to tell the questioner who asked about Verizon that "he's analyzed the situation well ... he's very capable of thinking it through very well himself."
Ah, thank you for the reply
. To me, the pharma basket feels like the prime candidate then. He definitely understands the oil business and its related capital cycle, except for the big unknown in where the oil price is going. But I highly doubt that he has analyzed the drug research pipeline of all those huge companies on a detailed level (would it even help for a layman?) just to put a few billion to work.
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On 5/3/2021 at 5:08 AM, LearningMachine said:
@Xerxes, you are probably right. Do I remember correctly that Buffett publicly committed to the Japanese companies that he will be a long term shareholder?
Which companies do you think he might have meant, given he started talking about them as "And they are as a group." Maybe some of the pharma companies, e.g. BMY and ABBV?
I think figuring out the answer to this question will help us figure out what he sold in Q1.
If I remember correctly he referred to the amount as $50B? So it probably includes a lot of positions where the buying is not his typical buy until it makes a difference for BRK (Apple, BAC, etc) or the position size is as big as it can get given he doesn't want BRK to be a bigger owner (banks other than BAC, airlines, etc).
So my guess is that it refers to several of the smaller positions which are not bought by Ted and Todd like Verizon, Chevron, pharma basket, Japanese basket. -
Hi :)
I think that counting all of the retained earnings is just slightly aggressive, since Buffett most likely wouldn't own the same companies if he didn't have to pay taxes when selling them. But I think that giving them credit for deploying so much of the cash pile is quite aggressive given the historic cash to float ratio.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
Buddy of mine sent a similar pic from Rome :). I had no idea they have branches in Europe.