shalab
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Posts posted by shalab
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Thank you for the transcript! It saved me a bunch of time. Joe Kernan comes across as totally boorish and unprepared - may be people like to watch this guy on TV. Good that he got the brick ;D
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They also have more gold medals than we do. Given we have more than 10 times their population, their performance is impressive to say the least. ;D
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Key things from the report:
1. Netjets now profitable.
2. Increase in float despite soft insurance market
3. Explains the derivatives and why it is not a problem for berkshire derivatives
4. Good explanation of some of the subsidiary businesses
5. Investments around 131 billion, earnings at 8 billion
6. Berkshire the best large insurer in the world - first time I saw him make that claim
7. Explains BNI deal rationale
8. Thinks BRK will do well for decades, highlights some of the CEOs of subsidiaries, huge toast to Ajit Jain
9. Generally explained a lot of things not explained otherwise
The book value came in lower than my range, strictly going by 1.6 times book value measure for BRK, the stock is worth 135K/A share. But this is looking in the rear view mirror.
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Good letter - enjoyed reading it. Explains the growth in float, the derivatives contracts, the rationale for buying BNI.
I was expecting the investment income and book value gain to be slightly higher than was reported. Never the less, a good report and I think the stock is still undervalued but not as much as it was two months back ;D
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It is going to cost a huge number anyway - SWCEY may get interesting after the payout.
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Unless BRK does another big acquisition ( like Krafts or Mars ), it is likely there will be dividend in another five years.
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This is a bit dated as JAVA buy out is now done...
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The total volume of A+B shares has been large enough since the split announcement that I dont expect a significant price hike at close tomorrow or early next week.
It is an easy trade otherwise, buy this week and sell at the close. Also, short at the close so when everyone dumps next week, cover the short. Also, there is going to be a good supply of new shares early next week as BNI deal closes some of which will no doubt change hands soon.
I expect the index funds to buy at close tomorrow so they dont lag the market come Monday. I am sure they have made their arrangements to get the amount of shares they need. They have been through this exercise many times to mess it up.
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CNBC said that 43% of shareholders opted to get BRK stock and 20% didnt choose any option. Looks like we are going to get proration. Also, a significant number of new owners aren't that dumb either.
cheers!
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I think this goes well with the internal/external score card story from the snowball. The rating agencies will come to their senses someday. The train traffic looks like it is picking up which means better outcomes for BNI.
Buffett has been optimistic that he is going to beat Mrs B and Methuselah since the nineties.
We will see how this unfolds. My bet is with Mr. B. ;D
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BNI is a done deal, just looks that way from the stock price action. When you say FFH is a better buy than BRK, what time frame are you looking at? Please note that BRK's businesses are very depressed at the moment as are the stock holdings just like FFH.
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One of the disappointments of Schroeder's book is the lack of information about personal performance. I believe this was intentional because critics would have jumped on the difference in performance.
I dont believe Schroeder left anything out because of critics would have gotten at Buffett.
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Think he is going to compete with the legendary Methuselah for longevity ;D
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No serious errors last year. Should have bought more SNS than I did. Have cash and looking for good entry points in the next several months. I think one can make some serious money in the next several years and hope to capitalize on opportunities.
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In her blog, she says she will be sharing more info on Buffett's buys. She also says it will need a community to analyze the buys. I think both are good points which will get her a following. I think this move is better than the tired psychological analysis.
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Thank you Sanjeev for a great interview - very insightful comments in many areas!
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There is no question that BRK will do better in the next few years compared to SP500. Watsa has come out and said in five years FFH book value should be much higher. Now if you compare BRK and FFH portfolios, there is significant overlap. The float is continuously increasing. If you analyze BRK, the EPS has declined but the investments/share are going up in a straight line. Buffett says the competitive position of BRK subs has gotten better though it doesnt show up in EPS yet. The press has been busy on the headline news whereas the underlying engine is running better than ever.
cheers!
Shalab
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Apparently yes, according to KFT CEO. Wonder what Schroeder has got to say about this.
http://business.timesonline.co.uk/tol/business/columnists/article6999838.ece
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For the people that read "poor charlie's almanac" the story of serpico in nytimes today.
http://www.nytimes.com/2010/01/24/nyregion/24serpico.html
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I think the book value is no longer a good indicator of value of berkshire. The two column method is a better indicator as it is indicated by Buffett himself. The two column method is "investments per share" + earnings * a reasonable multiple".
This approach is especially relevant if the BNI deal goes through.
cheers!
shalab
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Something changed which caused her to go full negative. The video Sanjeev put up on this site of her talk was pretty good.
One thing I observed was that she started claiming herself as a "writer". To make her claim legitimate, she said she would have to be neutral of the subject. I think the need to be recognized as a "writer" caused a series of misjudgments. This caused Buffett to be cool towards her which made her turn hostile.
One has to be careful to avoid the title based bias - I have seen a lot of crap happen in the corporate world with people chasing titles.
cheers!
Shalab
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I woke up late today; apparently he bashed the Kraft deal for Cadbury and selling the pizza unit. Anyone else watched it?
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WSJ carried an article on this yesterday. It said the block was profitable but wasn't earning the hurdle rate of 14% the other groups within Swiss-Re were.
It is long tailed insurance and looks exactly like the equitas deal.
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which is just as well. the little guy who couldn't buy a 'B' share won't go to the annual meeting. if they go, there will be more sales of berkshire merchandise.
Pepsico Chief Indra Nooyi Spars With Warren
in Berkshire Hathaway
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Indra was impressive. The whole exchange looked like a tiff on the transcript but watching the segment, I think she did a good job. I think she has done a good job at Pepsi.