MarioP

The growth of indexing introduces a rare phenomena in the market. As the price of a stock in the index grows faster than the index it will increase it weight in the index based on market cap. So indexer will buy more if the price go up. So will the momentum investor. The demand will go up if the price raise. In economics the branch that study this is the elasticity of price. https://en.m.wikipedia.org/wiki/Price_elasticity_of_demand And in the theory it’s mentioned as a rare phenomena that for some good demand can go up as price go up. https://en.m.wikipedia.org/wiki/Giffen_good or à Veblen good https://en.m.wikipedia.org/wiki/Veblen_good My last economy course was in 1981 so I need to study this a bit but perhaps we will find some theorical basis to study the growing impact of indexing on the stock market. RIP Charlie Munger. Thanks for the lattice work thinking model.

Same thing here. I can imagine him asking Greg, Todd and Ted : what you don’t like about the portfolio? I’il put it in a state that will make you comfortable for the succession

Terrefic podcast. And don’t skip it because you know Fairfax. There is lots of interesting things, specialy your view of how the market work now that it is dominated by quants and indexers. And I must confess something : I’m one of those value guy who never bought Fairfax India because I didn’t want to pay the fees . I will have a serious look at it now that I know that they are waived until at least 21.

I was already a shareholder of Apple when Steve Jobs died. No doubt that Apple changed under Cook. And it wasn't for the worst. Now Berkshire will change under Abel and it doesn't mean it will be bad. We will see but there is nothing guaranty. At this point I am not confident enough to keep BRK at 20% of my portfolio like it is since 1995. I will probably put it down at 10%. There is a good chance that in the first 2 or 3 years of is tenure Able will be able to pick some low hanging fruits to boost operational earnings.

One of the problem might be attracting top talent at the subs. If I was a rising star in insurance where would I prefer to work? The sub in a conglomerate or Progressive? If my goal is to be CEO I would prefer a S&P500 insurance over Berkshire. So as the all star managers retires we perhaps have a succession problem as top talent choose to work elsewhere than a conglomerate where mandatory retirement age is 105.

Thank you for that. I particularely appreciate the Brian Bradstreet explaination on how they come to buy the CDS before the financial collapse of 2008

Thanks for the numbers Nwoodman. I was calculating that to complete my previous post. It means the buybacks stopped around 1,5x P/B

No buyback in june. It means no buyback over 400$ per B share. Combine this with all the equity sells and you get a Buffett very bearish

Ok the base argument to do a break up is that Berkshire is too big to beat the S&P500…But which is the biggest capitalisation, BRK or S&P500 ?

You should talk about it to Fairfax employees at the AM. Perhaps they can have a reedition. Just tell them that they have at least three takers

Thanks for the Munger quote We’re very lucky to have a 92-year-old in such good shape as Warren and we’re very lucky to have a chief executive like Greg. Greg is very remarkable. So for Charlie Greg is already the CEO in the day to day

He said that a year where operational earnings are up 20%…Bring me more boring performance like that

From 1989 letter to shareholders o Below we list our common stock holdings having a value of over $100 million. A small portion of these investments belongs to subsidiaries of which Berkshire owns less than 100%. 12/31/89 Shares Company Cost Market ------ ------- ---------- ---------- (000s omitted) 3,000,000 Capital Cities/ABC, Inc. ................ $ 517,500 $1,692,375 23,350,000 The Coca-Cola Co. ....................... 1,023,920 1,803,787 2,400,000 Federal Home Loan Mortgage Corp. ........ 71,729 161,100 6,850,000 GEICO Corp. ............................. 45,713 1,044,625 1,727,765 The Washington Post Company ............. 9,731 486,366 None of the top 20 largest cap. And 30 years later Geico is probably the best bet for future gain

Strange question. After WB is gone Greg will be the big boss. So he will do what ever he think is good for the long term of the company. He writes the mandat and have it approve by the board. Nobody will give him mandate