seshnath
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Posts posted by seshnath
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Around 19:08 Buffett said he made a lot of money on Freddie Mac and Fannie Mae mortgage pass throughs.
(1) What the heck is a mortgage pass through? CDO?
(2) Anyone know anything about this trade? It sounds interesting.
(1) What the heck is a mortgage pass through? CDO?
Mortgage pass through or Mortgage Backed Security (MBS) is just an undivided interest in a group of mortgages. (think of land ownership if you own a condo.)
CDO (in this case, called a Collateralised Mortgage Obligation or CMO), on the other hand, will have a structured payment obligations in tranches. In short, MBS or pass throughs are less complicated than CMOs.
(2) Anyone know anything about this trade? It sounds interesting.
Here's someone who markets these. (not a recommendation of the product or the company)
http://www.davidlerner.com/collateralized-mortgage-obligations.aspx
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Have you seen Buffett lately? He is not preparing to give up managerial duties, despite what Alice and the rest of the press seem to think. He is still at the top of his game. Berkshire isn't going to spin out equity positions either.
Warren was responding to the market price of Berkshire - he has stated many times that he views investments per share as having the utility of equity, so when we traded down to investments per share (much of which is not funded by float but owned by BRK outright), the market was valuing 75 non insurance subsidiaries for pennies. Burlington Northern alone would sell for $40 Billion on a desert island today.
Everyone wants to read into this announcement - but it's all in the press release. Buffett picks his words very carefully and he's been saying for a long time that Berkshire's IV is far in excess of book value. Last week was the cheapest Berkshire has traded in the 15 years I've been paying attention - that's for sure.
So why the restrictions? He basically laid out instructions on (a) the actual price floor and (b) the cash that is required to remain at Berkshire at bare minimum. That is very unlike Warren. Those look more like instructions to a third party. Why wouldn't he just have the board approve of a boiler plate buyback and buy opportunistically?
Maybe he wants to be transparent in order to treat all shareholders fairly? But this seems unusual to me. It's all speculative of course.
I think you may have hit the nail on the head.
WEB has been giving more and more information to shareholders in a very in front of your face way to let them determine the valuation of BRK. This year's annual letter is an example of this. It's possible that being included in the S&P 500 index also has impacted his decision on disclosure.
Well, the rationalist in him must say that at his age, the actuarial probability is closer to 8% that he will die this year and it worsens by each years' passing. I think the resolution is worded for that.
http://www.ssa.gov/oact/STATS/table4c6.html
Also, think about the largest seller in this market - BMG Foundation. WEB donated the shares and how would it look if BMG gets less than book when it sells (assuming that is their clear strategy to fund the goals.) I think this may have played a role as well.
Though I would have loved to buy more BRK, makes a lot of sense in the larger context.
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seshnath,
I don't really know much about the monex group, I pulled up their financials on FT.com but haven't looked deeply, I'll dig in later today. I did notice that before 2010 their FCF was greater than the current market cap. If they can get close to that level they will throw off enough cash to go private every single year, Japan is indeed cheap!
I looked at them during the Fukushima troubles. It stood out because of the earnings. I initiated a small position back then and has gotten a little cheaper on OTC ever since. Also, recently according to their press release, they bought back about 6% of their stock about 3 months ago. They have cut the interim dividend though. (I am not pitching the stock; just sharing some info.)
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5. Real estate assets. Federal Government owns approximately 703 million acres of land still. http://www.propertyrightsresearch.org/2004/articles6/state_by_state_government_land_o.htm
6. IMF special drawing rights
Both are already on the balance sheet.
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I have bought Japanese net-net stocks and still hold a few. I've also posted some research on some of them on my blog at http://oddballstocks.blogspot.com
There was a thread floating around here for a while about Japanese net-nets where I had posted a bunch of direct links, here is the thread: http://www.cornerofberkshireandfairfax.ca/forum/index.php?topic=4325.0
Mentioned in the thread is the Japan Company Handbook which is like a Moodys for Japan, here is a link to purchase the latest English version: http://www.toyokeizai.net/shop/magazine/jch/
What do you think of monex group?
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So I think we'll be just fine over time.
"In the long-run, we are all dead" is something that comes to mind.
No question that over time, we will be fine. I am an optimist.
I like the wealth tax idea. I always wondered why there was no such thing in the US and instead has an estate tax. Seems that you can't escape taxes by dying.
Also, wouldn't the wealth tax put a downward pressure on GDP and other income taxes. (The model in India is that wealth tax is not tax deductible for income tax purposes.)
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3. The strongest military in the world.
4. The constitution (If restored)
How would the numbers look if a take away the bush tax cuts?
3. You can't really go on the offensive (meaning, violating rights of other nations) with the strongest military anymore in this 21st century world. It is more of a white elephant. (Don't get me wrong, I am all for the individual soldier who is&/willing to sacrifice/ing his life. We are talking about more than defense collectively with military). US can get concessional treatment for its companies (may be) from countries it helps out (say like Libya, Iraq); but it is more like sales and marketing expense for a business than cost of sales or capex.
4. Constitution, as far as I know, still exists - as it has in its present form since the last amendment made. Enforcing it, is where failures are there. Besides, how would that produce income or reduce spending?
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You may want to look at this chart of US wealth: http://www.federalreserve.gov/releases/z1/current/z1r-5.pdf
Something like over 100 trillion for all entities.
All entities are fine, 77 trillion in networth - How would US Government transfer those assets to its own balance sheet without suspending the bill of rights?
For instance, how would Romney's houses become US government assets? (other than through the exercise of power of taxation)
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Thanks but what am I going to do with $10,000 in Sear's gift cards? Do people still shop there? ;D
STEP 2: Sell the credit cards at PlasticJungle. PlaticJungle will pay 83 cents on the dollar for Sears cards.Cost you about 400 per 25k miles, didn't it? Almost the cost of a ticket.
Also, does it count toward status?
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I had tried SETI as well. Haven't had spare computing power/net connectivity since that time to try other projects. Are there any projects out there like SETI now?
SETI's the grandpa, but there are now a ton. Many in the life science, astronomy, mathematics, etc.
http://en.wikipedia.org/wiki/List_of_distributed_computing_projects
Thanks.
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2. The ability to print money must count for something. Since some amount of inflation (1-2%) is widely accepted to be necessary, this at a minimum provides one source of funding that is not accounted for. If Govt were to auction of the ability to print money, what would be its value? Bidding starts at $10 Trillion. :)
Hasn't that ability reached its maximum already? It is very clear from the balance sheet.
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I did not grow up in Kerala though, but you know despite everything, they did not ruin the chai!
BTW, netnet I am glad you like chai. You know, the stereotype of a Kerala communist is the guy who lives on chai and a spicy donut type snack called "parippu vada" "http://en.wikipedia.org/wiki/Parippu " http://en.wikipedia.org/wiki/Vada.
Have you visited?
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I have ran one in a long time. I tried the SETI one a long time ago and I looked at one of the cancer ones or something a while back. I liked the part about heating your apartment with it. haha.
I had tried SETI as well. Haven't had spare computing power/net connectivity since that time to try other projects. Are there any projects out there like SETI now?
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I was trying to do a bare back to the basics analysis of US Economy.
There is lot of talk in the media that Fed is the problem - look at the balance sheet:-
http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab9
http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab9c
And drilling down into currency,
http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab11
It will tell you that the currency is issued on the basis of Treasury, Agency and other obligations. (Arguably, gold stock is being valued at $40, so the backing is higher than it looks, so what?.) At least there is backing.
Now, looking at US government itself,
http://www.fms.treas.gov/finrep/finstmts/fr_fin_stmts.html
Look at the balance sheet and statement of operations, 13 trillion in the hole end of last year!!! A loss of 2 trillion, just last year.
Look at the statements of net cost - 4 trillion in cost - half between health and military. Offset by about 2 trillion in individual income taxes. Holy ****!!!!! was my first reaction.
My question is not really about solutions to the obvious problem. My question is, am I missing anything on the positive side? Is there some hidden asset that can be monetized? I will start with the first answer:-
1. there is the taxing power. ::)
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My comments towards tilson are based on facts...
His performance is just terrible, and I can't believe some of you think otherwise.ment than you are dreaming.
Tilson = Mediocre hedge fund manager, and average Mutual Fund manager or in other words, nobody we should even be discussing on this board
I don't know how this is so hard to get. He beat the market over a decade. The majority, actually the vast majority, of people don't do that. Therefore his performance is above average by definition.
Actually I've seen evidence that with fees and taxes and transaction costs and slippage, less than 15-20% beat the market. This isn't even a matter of opinion. You can debate that Tilson is not a great investor (or superinvestor, which he is not) or that he is lucky or something, but it is a fact that his past performance has been above average. So it's not even that I disagree with you're opinion it's that you're lying. If you want to change the definition of terrible to anyone who's performance is out of the top 2% of investors that is fine, but you need to lobby Websters not me.
Hester - I guess Moore's point is that beating the market doesn't make him superinvestor; he has to beat his peers. It is something like A-Rod beating my baseball score Vs. A-Rod beating say, Miguel Cabrera and other Major league players.
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Seshnath - Greespan was a friend of Rand but nothing he did as a Fed chairman would have been approved by Rand. I suggest you re-read Francisco d'Anconia's speech on money in Atlas Schugged... Had Greenspan stuck to that definition of money, I doubt he would have kept interest rates so low for so long... The Fed and its politburo philosophy of long term of the economy represents everything Rand fought against...
I hear you Eric50. I remember thinking after reading an article written by Greenspan defending gold as currency during the time he was with Rand and wondering about the direction he took in his life - first taking up a post as a regulator and then gradually undermining that position as regulator with the naive belief that people self regulate the best. I saw a big inconsistency in that behavior.
Like Charlie Munger said, Greenspan was one of the few to express contrition. That redeems him in my books back to a normal level. I don't think of him as a Maestro or even an Ayn Randian, really.
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Very good movie, got a chance to watch it at TIFF
Heard on the BBC Strand yesterday about the movie. Brad Pitt is playing Billy Beane!!!?
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One of the great things about the book was the reaction from the reporters who cover sports. A lot of them hated it, because Billy Beane was removing (trying to) the emotional aspects of scouting and trying to make it into more of a science (numbers and outcome based). Sounds like value investing, no?
Exactly!!!! I thought Billy Beane was the Ben Graham of his craft.
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I highly, highly recommend Think Mental Models. It's available in PDF for $2.00 (U.S.)
http://www.thinkmentalmodels.com/
it is rather like one's own cheat sheet to mental models. Way easier to absorb than Bevelin's book, From Darwin to Munger, not because it's dumbed down, rather it is visually oriented. (For me, it has become part of the graduation gift for college student nephews, nieces, etc. Now that you have graduated, it's time to get educated! And I do pay for each copy, by the way.)
The best $2.00 you will ever spend, guaranteed!
netnet
Did just that a few weeks ago. Agree totally with you net.
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Sorry sesnath, I must disagree. (I did not grow up in Kerala though, but you know despite everything, they did not ruin the chai! And it's not as if any other party has particularly clean hands.)
I like (most of) you guys and how you think on financial matters, but seriously Ayn Rand--indeed it is fiction and rather insipid fiction at that, whether as fiction or as political theory. (how's that for being a skunk at the garden party!)
I am reminded of Munger's comment about overdosing on Rand, something to the effect that even the economic equivalent of axe murders were considered acceptable as long as it was "market" based.
Net - I am not talking about partisan politics here. Agreed, it is fiction. All I said was it changed the course and approach to life. Followers of Rand may have taken it to a ridiculous extent - especially, Greenspan.
Let me see, if I can try to plot the course of seshnath without Ayn Rand's influence.
First, I wouldn't be talking on this board - I wouldn't have invested in Berkshire - would have probably never heard of Warren Buffett and definitely never Ben Graham.
Even if I did join this board - my language here would be peppered with terms like bourgeois and petty-bourgeois and exploitation and class warfare - the list is endless.
I am with Munger when he said that it is a bad idea to overdose on Rand. (my addition to that is "and for that matter any 'ism' ").
After this particular shift in paradigms, I have always tried to seek out the other side of the argument. This approach (somewhat like inversion) has helped me a lot with my investment thesis and life in general since that point of time.
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I have it queued in my reading list. Picked the book up after reading his presentation at Jackson Hole a few years ago.
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[amazonsearch]Atlas Shrugged[/amazonsearch]
I was born in the state that democratically elected the first ever communist government. This book changed the course of and approach to my life.
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Do you need to know anything about baseball to make sense of this book? I wanted to read this book for a long time but I have next to no knowledge of baseball.
Thanks
Vinod
Vinod - I know/knew nothing about baseball even after reading the book.
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[amazonsearch]Money Ball[/amazonsearch]
Anything by Michael Lewis is a must read inmo (and Seth Klarman's). I read this book after his recommendation. He said its the best book about Value Investing that's not an investing book. Its about a guy who builds a team with cheap players using unconventional metrics and methods.
Highly recommended. I plan on seeing the movie, hopefully they have done a good job with it and it works as a good substitute.
My views exactly.
I thought this was one of his best books and I have an autographed copy (from 2008 CFA Conference in Orlando)
Warren Buffett On Charlie Rose Sept 30.
in General Discussion
Posted
If your belief is that it is a secular bear market, why not just hold cash ? you will come out smelling like roses. (assuming you haven't committed to be invested all the time.)
Also, aren't you better off just turning down that kind of investors who chose their time frame rather than yours?