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Tim Eriksen

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  1. It is a bit weird but PIF3 has different setup than PIF2 and PIF4. PIF3 says year end allocation while PIF2 and PIF4 have valuation dates triggered by redemptions or contributions.
  2. From the annual report, if more than $25,000 comes into or out of the partnership, incentive fees are assessed whether or not it is the end of the year. To be fair what they would have to do is pro-rate the 6% hurdle for a partial year and assess incentive fees if any were earned. That way everyone is treated equally and the NAV can be the same for all. Thus it would be impossible to come in above the HWM since the new addition would trigger assessment of incentive fees.
  3. This is a bold accusation. My understanding is that new investors come in at all time high water mark - NOT from purchase price. IF I'm correct in this understanding, would you agree that your scheme above would not be accurate? GP doesn't get paid until they've made 6% compounded annually from all time high water mark. Thus, if someone buys in today, NAV would have to compound at 6% annually from Dec 2017 high. Maybe some funds do it that way, but I have never seen it. Since incentive fees are usually charged at year end, it is the year end high water mark (not all time) that matters. Typically new investors come in at the current NAV which is that investor's high water mark. Even new money for existing investors is blended so that once the dollar difference between current value and the high water mark for incentive fees is hit they are charged incentive fees.
  4. For 2020 first quarter: PIF2 -33.7%. PIF3 -27.7%. PIF4 -40.4%. S&P 500 was -19.6%, NASDAQ -13.9%. PIF2 Annualized return NET since October 2000 is 9.6%. S&P 500 is 5.1%, NASDAQ 4.9%. (even with market since June 2002) PIF3 Annualized return NET since February 2002 is 8.2% S&P 500 is 6.8%, NASDAQ 9.1% PIF4 Annualized return NET since October 2003 is 5.0% S&P 500 is 8.1%, NASDAQ 10.5%. For informational purposes. I am not trying to pick on the guy.
  5. In general they trade at a multiple of AUM; however since fees vary widely versus twenty years ago that greatly impacts the valuation. A sub-advisor earning 30 bps or a fixed income manager earning 40-50 bps is not near the same as an equity manager at 80-120 bps. ETF have even lower fees, hedge funds much higher. Then you factor in operating margin. Traditionally average 30-35% but some are clearly take a bigger piece of the pie than others. So basically I guess it is really based on free cash flow and not AUM. :) Look at fund performance (actual investing) and fund flows (which shows how good the marketing is).
  6. PICO Holdings (PICO) - water rights in Nevada and Arizona JG Boswell (BWEL) - water rights in California and Australia
  7. Margins and return on invested capital is not the same. A grocer can earn high returns (plus 20 pct) with low margins, high volume. Thanks, but how does that differ from market investing using leverage? Was the grocery business thought so stable that one could use greater leverage? (I assume it is not thought so anymore.) Totally unrelated. Borrowing to invest in the market expecting to earn a rate higher than your cost of debt is not the same as a business with low margins and high turnover. It doesn't necessarily require debt. A 3% profit margin that is achieved six times a year is a roughly 18% return on capital.
  8. Am I missing something? Relatively costless policy changes???? Aren't the proposals massively costly? In the trillions in terms of the US economy.
  9. “You shall not oppress a hired worker who is poor and needy, whether he is one of your brothers or one of the sojourners who are in your land within your towns. You shall give him his wages on the same day, before the sun sets (for he is poor and counts on it), lest he cry against you to the Lord, and you be guilty of sin." - Deuteronomy 24:14,15 Should there be fees for the worker to access what they are due? I don't think so. Why should the laborer have to provide what is effectively an interest free loan to the employer. I am generally on the conservative end of the spectrum, but that doesn't mean employers should take advantage of workers. It seems to me eventually technology will make daily pay or "advances" easier, and government will compel it by law. If men were angels government wouldn't be necessary. The truth is, men (and women) aren't, therefore if employers won't do the right thing voluntarily it must be compelled. Fair pay (minimum wage) and timely pay. I would love to see the whole payday loan industry be put to death. It is not a service. It is abusive, sick and shameful.
  10. For 2019 first half: PIF2 3.8%. PIF3 2.2%. PIF4 14.6%. S&P 500 was 18.5%, NASDAQ 21.3%. PIF2 Annualized return since October 2000 is 12.2%. S&P 500 is 6.0%, NASDAQ 5.3%. PIF3 Annualized return since February 2002 is 10.0% S&P 500 is 7.8%, NASDAQ 9.7% PIF4 Annualized return since October 2003 is 8.5% S&P 500 is 9.3%, NASDAQ 11.3%. quote from the letter "These last twenty years have been filled with tremendous learning and fun. I have taken plenty of arrows in the back. Made a zillion mistakes. I can honestly say that today I am at the top of my game. I am the best I have ever been as an investor."
  11. $50 billion gain means the half they purchased in the 1970's for $47 million is now worth $25 billion. WOW Is the $50 billion realistic? Underwriting pre-tax was $2.4 billion. GEICO has $22 billion of float out of BRK's $123 billion. Investment income was $5.5 billion, or about 4.5% of float. If I attribute 1/6 of that to GEICO that is another $0.9 billion. Total pre-tax would be $3.3 billion. 16x pre-tax or about 20x after tax for a best in class, strong grower.
  12. After the meeting at the Willow Oak event I spoke with a guy who said he was the one who asked the question. I had skipped out of that part of the meeting so I can't confirm it was him. He was annoyed that Buffett didn't really answer the question. The guy said he purposely included arbitrage because he said that Alice Schroeder had told him that Buffett had said to her that he believed he could make 50% annually in treasury arbitrage.
  13. I don't think they are out yet. The nine month results someone passed on to me were not good. PIF2 -26.4%, PIF 3 -32.8% and PIF4 -10.5%. Rain Industries continued to fall in Q4 from 166 to 134. It is currently at 116.75. For 2018: PIF2 -35.3%. PIF3 -41.9%. PIF4 -22.8%. PIF2 Annualized return since October 2000 is 12.3%. S&P500 is 5.1%. PIF3 Annualized return since February 2002 is 10.2% S&P500 is 7.0% PIF4 Annualized return since October 2003 is 7.8% S&P500 is 8.4%.
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