ERICOPOLY

Why does my cost basis in USD come out to $420? Is that a sign the party is on again?

Yes, quite likely. "As previously reported, upon closing of the Digit Insurance equity issuance in the third quarter, and upon final approval by the Indian government of its previously announced intention to increase foreign ownership limits, we anticipate recording an additional gain of approximately $1.4 billion or $46 in book value per basic share."

It would be a good thing to forego stock buybacks and instead use the money for other investments that they find cheap so that things aren't so leveraged all the time. It builds financial strength which is a hedge in itself. This is what Buffett did over the years -- he talks about the "mighty Amazon". He's talking about the strength of those diverse streams of cash flows. Many tributaries contribute to the Amazon river.

Up until 2 weeks ago I've been completely out of this stock for 8 or 9 years. And now my average cost of $525 CDN is actually below the $540 USD book value.

I wish I could remember his name but it's maybe better that I don't. At Microsoft in 1998 there was a development lead on the browser UI team with an office down the hall from me. He shorted Yahoo! and told everyone about it. He lost a ton of money in 1999 and closed it out. He did NOT want to talk about it. A dev named Edward who was one of his reports would raz him about it often.

No.

Berkshire I think doesn't like to buy alongside the copycat buyers because it can lift prices when he still wants to buy more. I'm not sure how that argument applies to Prem who is NEVER going to short again and therefore shouldn't care how many short sellers know what specific stocks he shorted in the past. Example: "At this present time I'm pledging that I'm never going to short again, but I won't tell you what I lost money shorting last year because when I short it again I don't want other short sellers competing against me for buyers".

Why is this for him to know and for us to find out? Is he embarrassed to tell us what kicked his ass so badly?

The AAPL/MSFT examples come from his own punditry on tech bubbles (he keeps seeing tech bubbles). FAANG for example, is where mention of Apple comes from, and MSFT was mentioned by Prem in this year's letter to the shareholders where he seems especially impressed that it has a 40x PE. So this is an analysis on what the fuck is he doing that for, and if he's building businesses then this is a side conversation about his punditry that he engages in when penning his letters. As I mentioned, I have a fear that he's not going to be able to help himself and will start shorting them again.

My loan is in process for a cash-out refi courtesy of the real estate appreciation in my area. That's a megaton payload weapon compared to the stimmi check I got last year.

Sanjeev and I both agreed we don't know if the probability is 30% or 60%. However (and I haven't gone to see Warren and Charlie 40 times), it is plain as day that Warren has increased his odds by keeping it simple -- investing in boring industries and boring companies, with long histories, and high quality franchises, with capable managers, all of which put together increase his odds of knowing when it's really and truly 90%. That's his wisdom that he repeats and repeats ad nauseum. I think Warren realized a long time ago that margin of safety is ephemeral because it is subject to bias. And he has these mechanisms to help him improve his success at calculating the odds, and no matter how many times he repeats himself people still don't listen.

Nor could he buy MSFT at 40x. And one can equally point out how fast the PE comes down when a company is growing at 30%. It's not like it's growing earnings at 5% with a 40x PE. Context.

The low rates have created a form of lasting stimulus that won't go away even when rates go back up. Over the past couple of weeks 30 yr fixed mortgage rates have hit like 2.25%. A household with a $500,000 mortgage at 3.6% can refinance and immediately improve their cash flow by a few hundred dollars a month, while at the same time increasing their monthly principle payment. So they're not only spending more, but while doing so they're also paying down their mortgage at a faster rate.

I've said this before. I'm a speculator. That absolves me from criticism for doing it because it's how I identify myself. I speculate. Warren and Charlie were always "too hard" pile on tech stocks (then along came IBM, AAPL, BYD). What I find interesting is even when MSFT and AAPL were single digit PE ratio stocks Prem still wouldn't go near them. He just has a tendency to short or harp on the ones that people are most excited about (high PEs) but that doesn't make him right, and it may not have anything to do with a bubble: They may be expensive for good reason, and YOU may be the patsy. It's all "too hard" to know, hence the name of the pile. Prem appears to only have been involved in Blackberry because it made some sense from a price to tangible asset metric. But that doesn't mean it will ever earn any money, and it hasn't. Opportunity cost is real cost. It may earn money yet. Fine. But opportunity cost is real cost. Attending Berkshire's meetings for 40 years now, I don't know how he hasn't yet learned about the "too hard" pile and technology stocks. Just grab popcorn and watch. None of us know if Microsoft is expensive at 40x earnings. Some probably think it isn't and they may very well know what they are talking about. We will watch and see.

To address the first paragraph: I've seen these arguments made before but most of us don't know what these probabilities are. We don't know 30% from 60%. Honestly, I don't. To address the third paragraph: I agree. I bought the shares recently. Which is why I've been obsessed with his FAANG obsession -- it's a risk I don't like.

I didn't understand the cloud thing in terms of how much money could be made and I missed the opportunity. Likewise, I don't understand if the P/E of 40x for MSFT is still cheap or not, because I still don't understand the size of the opportunity. Prem apparently thinks he does or he wouldn't be scoffing at the P/E, but he doesn't, does he.

Azure was in the making when Ballmer was CEO. Ray Ozzie announced it in 2008. But I sat in a meeting back in 2001 or 2002 when our VPs talked all about this future and how it would make the "Internet" wave of the 1990s look like small potatoes and I just never believed it. We mock what we don't understand. (Spies Like Us).

By 2011 the lesson should have sunk in when he was saying FB was trash.

Everything, and I mean everything that has gone wrong since 2011 is because of NOT doing what Warren and Charlie say.

Prem makes this comment in the 2012 Annual Letter: "I have attended the Berkshire Hathaway shareholders’ meeting since there were only 200 shareholders in attendance about 30 years ago. I still find I learn something each year from Warren and Charlie." Really? It sure doesn't look like it.

So... which single short position cost them $500 million last year? Was it Tesla?

I just can't read year after year of annual letters bloviating about tech stocks with high PEs while he treats BB as his darling.

I believe there is still over $40 million in capital at Dhandho Holdings and a bit more that 2/3 of it is invested in the stock market. So that's like $26 million or more still invested in common stocks. There is something that I don't like about this. Years ago now, he said that he was winding it up and that he would distribute the proceeds as soon as possible until only a "sliver" of equity holdings was left in addition to the Dhandho Funds GP. Well, I dare say that $26+ million is not the "sliver" we were promised. Instead, and for years now, he has telling remaining people that if they need liquid funds they can redeem their shares at book value WITHOUT ANY COMPENSATION FOR THEIR SHARE IN THE GP. I don't like this. Feels like they win big when somebody gets fed up and redeems. Please just return our capital as soon as possible as promised. Liquidate the stock portfolio now.

I watched Full Metal Jacket too many times back in high school. Animal Mother: "You talk the talk. Do you walk the walk?"

And today, I look up BB stock, and for P/E ratio it says N/A. But that's okay... Prem makes an exception for stocks that HE believes will grow future earnings. It's okay if he thinks so himself. That's fine, that's still value investing. So Prem today has this large BB equity holding making no profit at all, and meanwhile he claims that Microsoft is so richly valued at 40x. Well, put that 40x in context. Prem studied Japan and their low interest rate environment following their real estate collapse. Their stock market regularly had a PE of like 24 or something for years on end. How does MSFT's 40x stack up against 24x? Well, look at the rate of earnings growth of MSFT versus that of Japan.