schin

+1

Ben Graham essentially focused on mis-informed, bad management in his value investing approach (aka the cigar butt)... He and Buffett had to get control of the board or influence somehow to unlock value. I always thought they were activist investors before it was a thing. Buffett mentioned many CEOs and management teams are really bad capital allocators. So, you're lucky if they hoard cash.... otherwise like Salomon Bros, the management use it as a piggy bank to enriching themselves. The Directors are sadly in on it too. Directors are suppose to represent the shareholders..but, that's in theory.... It's like many hedge funds and mutual funds are actually asset gathers and closet-indexers.

@John Hjorth Are there any segments that were removed in the latest editions or only present/discussed in the early editions?

If professional sports are good reference points, nobody is sacred. The portfolio will be touched and redeployed. Look at DJCO, I mean.... Wells Fargo and Bank of America is being reduced nonetheless. Whether it's Lou Simpson, Sir John Templeton, Teledyne under Henry Singleton, the position will be touched sadly.

When Warren passes, I would expect there will be selling of his prized holdings too.

How different is this from Jeff Bezos and Amazon? Or Steve Jobs wanting small, technical teams of creatives?

True, once the business has negative earnings... the overpriced shares bought earlier becomes an anchor.

The beauty behind this is they have positive earnings, so the game is not necessarily over. Trading at a P/E of 9, it can catch up.

Does anyone have any examples of cannibals that didn't eventually increase in value? CAR has the possibility to be like Long-Term Capital. Good strategy until a Black Swan event takes them out. I also like companies that address corporate debt first before buy backs. Little or no debt gives companies a lot of flexility in good and bad times.. I rather than build the ark waiting for the thousand year flood. Otherwise, it's like picking nickels in front of a bull dozer.

@ValueArb - What is that number? Is there a fund does net-nets anymore? Even microcaps?

Man -- those that graduated last year.. is kicking themselves... Free tuition going forward... I need to try to get my kids admitted there now! LOL

I think the disrupting the compounding is a huge dagger. I do not know of many people who have kept 1-2 holdings static for 10+ years and allow Amazon, Google, BRK to compound for years on years. I have 1 share of BRK.B to get his annual letters sent to me. But, I remember back when BRK.B were introduced he specifically said he didn't believe they were a good value. Warren talked it down. Also, through the years, he talked about how his universe has shrunk and he would marginally outperform the S&P, if he was lucky. He's results have been good, but not great. I would love to have the early Buffett partnership returns.. but, the last 10-20 years have been good, but not great.. but, again, if you invested him in the 70s or 80s... it's been 30-40 years of compounding by him.. that's not something most people do nowadays. I would love to see a poll of everyone's longest held position... But, the average is probably 1-2 years, if I tender a guess.

He says BNSF will be around forever... So, we're in a down cycle. It'll be okay. He didn't talk about his World Book investments or Dexter or newspaper investments.... Some industries will run it courses. I guess he's just sad that BSNF, BHE, and GEICO has needed re-investments lately. All have needed some TLC lately. Industry wise, technology wise, and personnel wise. He doesn't have shiny Iscar or Precision CastPart or Lukizol to rave about.

@LearningMachine - Everyone of his businesses have risk. That's the whole point of margin of safety. That's part of your calculation. Whether you own 30% or 100% -- the risk is there...

@sleepydragon - I'm going to do the reverse Leonard DiCarpo and date 50-60 year olds that have bad hearts, but a lot of money...