berkshiremystery
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Posts posted by berkshiremystery
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http://2.bp.blogspot.com/-dxtQrBEnMAU/TsvkqSmnovI/AAAAAAAAF-o/gOH-5VNerYg/s1600/Corporate+Profits+vs+GDP.jpg
http://4.bp.blogspot.com/-HDQQhljk9dk/TsvlBeImAzI/AAAAAAAAF-4/TXZXBP_W4wI/s1600/Profits+%2525+of+GDP.jpg
http://4.bp.blogspot.com/-Na8Ez_Z-7RY/Tsvl8l9O5hI/AAAAAAAAF_I/7Az8qj8WCBY/s1600/Corporate+Profits.jpg
http://2.bp.blogspot.com/-pn9svTLtteo/TsvmEu-_BrI/AAAAAAAAF_Q/ALlLcQo9Z1s/s1600/After-tax+Corp+Profits.jpg
Source: http://scottgrannis.blogspot.com/2011/11/corporate-profits-are-still-very-strong.html
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I can only say that I watch this rising market daily with disbelief. No scientist can exactly predict the minute or second in which an earthquake will accrue, so neither can we predict the day when a major temporarily down trend in the stock market will start. My personal gut feeling let me say that the <invisible> "risk premium", relative to the current <actual> "risk premium" has come down considerably with this recent fast rise in the stock market and investors are currently living on some illusionary cloud seven in dreamland. With <invisible> risk premium I mean, if there is for some unforeseen reasons some dramatic shift what investors expect as a so called "risk premium". And this might only be some small shift of some butterfly wings, like changes in interest rates, Fed policy or something else. So can we quantify this <invisible> "risk premium"? My lazy brain (to be roughly right), only tells me that for sure, it only can be lower than this fake <actual> "risk premium" that investors perceive as currently normal. Market cap vs GDP, Corporate profits vs GDP, historically low interest rates are all some blurry warning signs that we can't dream forever this way on the cloud, and some day for sure will be some rough awakening probably through some yet invisible feedback loops to the main gravity center. Only the when this might happen is some open date. Remember,... Michael Burry went through some torturous time himself -- waiting. Cheers!
http://www.ritholtz.com/blog/wp-content/uploads/2012/07/7-20-12-Market-Cap-1.gif
Source: http://www.ritholtz.com/blog/2012/07/market-capitalization-as-a-percentage-of-gdp-2/
Actual Source: http://www.thechartstore.com/
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http://2.bp.blogspot.com/-yBFmN2eJ85A/UYaWcC5IlsI/AAAAAAAAF48/sUQ2kx9r6kc/s1600/Market+cap+to+GDP.jpg
http://1.bp.blogspot.com/-ZJ0ZDCyEEu0/UYaTbTpuRXI/AAAAAAAAF4s/geidfAze-Ps/s1600/LT+Dow.png
Secular Bull or Bear?
Actual Source: http://humblestudentofthemarkets.blogspot.com/2013/05/secular-bull-or-bear.html
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Just awesome, it's like traveling in time back. ;D
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Doesn't he even has preferential knowledge of what Buffett stores in his file cabinet at HQ. :P
So I assume that this wasn't his first private get-together. LOL,... way to go Calonego ;D
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Ha,... I might surprise you with some new picture from a Twitter stream of another Buffett family member. ;)
Buffett's son, Howard G. Buffett in a sheriff uniform posing with Eva Longoria.
http://s10.postimg.org/a9m7ckbzt/image.jpg
The picture was posted April 13th @ the official twitter account of Howard W. Buffett (Buffett's grandson). Howard G. Buffett and Eva Longoria went together on a humanitarian visit to Guatemala.
Howard W. Buffett @ Twitter
Peter Buffett @ Twitter
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Howard G. Buffett and Eva Longoria were together in Guatemala on a charity mission. They both went to visit the Farmers’ Association of Nueva Concepcion in the department of Escuintla.
http://s21.postimg.org/4qhrwnzzb/image.jpg
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http://s2.postimg.org/h7mtu0c21/image.jpg
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http://s24.postimg.org/nsv6jq6th/image.jpg
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http://s23.postimg.org/gsio7awhn/image.jpg
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WOW,... his followers went up by a couple of 10,000 in seconds,... and still rising,... now above 103,000. It seems maybe there was just some TV broadcast about this story and thousands signed up in the same minute.
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Only wonder, I didn't see him write...
Ok, it's his real tweet, for sure,... but it seems that he wrote his tweet already earlier before holding the tablet in his hands.
http://money.cnn.com/video/magazines/fortune/2013/05/02/f-warren-buffett-first-tweet.fortune
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Some great new book about Buffett and his birthplace Omaha is just about to be published for the annual meeting with never seen pictures.
"The Oracle & Omaha: How Warren Buffett and His Hometown Shaped Each Other"
by Steve Jordon
$29.95
Product Details
ISBN-13: 978-0-615-79394-8
Publisher: Omaha World-Herald Company
1314 Douglas St., Omaha, NE 68102-1811
First Edition
Publication date: 5/7/2013
Printed by: Walsworth Publishing Co.
Marceline, MO
http://issuu.com/christinezueck/docs/the_oracle_and_omaha_sample
http://issuu.com/christinezueck/docs/the_oracle_and_omaha_sample?mode=mobile
Pre-Order @ Barnes&Noble $19.96 (Save 33%) $29.95
http://s22.postimg.org/q57cz7h6p/image.jpg
http://s22.postimg.org/q57cz7h6p/image.jpg
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http://s18.postimg.org/sf3456fmh/image.jpg
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http://s10.postimg.org/yi06xbr7t/image.jpg
http://s10.postimg.org/yi06xbr7t/image.jpg
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Thanks for posting this, Sanjeev!
I'd love to see Ajit as the new CEO, but I'm not sure how plausible that is. I remember from a Buffett interview, I think from when he was in India, someone asked Warren if Ajit would make a good Berkshire CEO. Buffett replied that he would give him the job in a heartbeat but he knows that Ajit would much rather keep his current job.
I remember that Buffett said... if Charlie, Warren and Ajit are ever in a sinking boat – and someone can only save one of them – swim to Ajit (Jain).
EDIT: I just saw that this was also mentioned again in the WSJ article from above. Anyway,... only Sanjeev had forgotten that Ajit was also at Fairfax's 2012 AGM. So it seems Omaha is secretly peeking in Toronto and Ajit plays the undercover agent. ;)
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You should all stare at the China bubble.
They have the largest shopping mall in the world and it's 99% empty since its 2005 opening !!!
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CNN: The largest shopping mall in the world, China's abandoned mall
http://www.youtube.com/watch?v=d8WitBOWL0M
Ghost Cities - China
http://www.youtube.com/#/watch?v=wm7rOKT151Y
http://s11.postimg.org/glec2gow3/image.jpg
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New South China Mall (the largest shopping mall in the word)
http://en.wikipedia.org/wiki/New_South_China_Mall
List of largest shopping malls in the world
http://en.wikipedia.org/wiki/List_of_largest_shopping_malls_in_the_world
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netnet,
My friend recently started the attached blog. He's from academia and has little interest in investing - which is a good thing IMO. I know he's reached out to C. Munger and others about incorporating some of Mungers ideas into the classroom. His blog may be worth keeping on your radar.
http://icrossthink.blogspot.com/
Allan
amecham,...
maybe I tease your mind with some mental virus. ;) Some interesting read might also be from Richard Brodie "Virus of The Mind: the New Science of the Meme". The book carefully builds on the work of scientists Richard Dawkins, Susan Blackmore & Douglas Hofstadter. Brodie's main accomplishments had been, dropping out of Harvard, joining Gates as his assistant, and writing the main code for Microsoft Word.
http://www.amazon.com/Virus-mind-New-Science-Meme/dp/B00396JZTE/
http://www.xpter.info/picture/free/Virus-of-the-Mind.jpg
http://www.memecentral.com/rbrodie.htm
http://en.wikipedia.org/wiki/Meme
http://en.wikipedia.org/wiki/Viruses_of_the_Mind
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You are able to read his blog directly at
http://covestreetcapital.com/Blog/
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and some overview of their investments
http://www.nasdaq.com/quotes/institutional-portfolio/cove-street-capital-llc-867988
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Fairfax's common stock portfolio (as of last report) is almost exactly 50% of shareholder's equity.
Have they ever taken this percentage meaningfully higher? Or have they ever indicated at what level they consider to be "maxed out"?
Well, I don’t know, yet the last time I checked, MKL had a common stock portfolio worth 62% of shareholder’s equity, without any hedges in place. So, I guess FFH has much room to get more aggressive in common stocks. :)
giofranchi
“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence. One’s knowledge and experience is definitely limited and there are seldom more than two or three enterprises at any given time which I personally feel myself entitled to put full confidence.” - John Maynard Keynes
The more important thing about the quarterly changes of the weightings of it's equities portfolio relative to shareholders equity should be put on the aspect how this change is archived: A) through appreciation of share values, or B) new purchases. In the case of A, I wouldn't be worried at all. Cheers!
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I am a long time Fairfax shareholder with more then 60% of my family capital located in FFH. Living around Toronto I feel it is my responsibility to participate in AGM and report to all who could not attend.
This was my 12th FFH AGM and I can tell you I never felt better. I believe our capital is as save as it can be (we all understand the risk) and we are ready to explode in due time.
I am not a gifted writer so it is difficult for me to write about all the events on wednesday and thursday, specially that they are growing fast and not always to my likening. I can tell you there is nothing like meeting our old friends, making some new, listening to answers to questions and concerns of other shareholders or shaking hands when looking them into their eyes with members of the Fairfax team.
You have to do it yourself one day, mean time I can tell you, Fairfax is OK, and I would argue much bettrer than that.
Cheers, Jack Wisniewski
Jack,...
good that you feel comfortable about FFH,... same as me,... but I already knew your thoughts before you wrote them here,... ;) I felt great seeing regular faces in Toronto again. Cheers to Sanjeev, Alnesh, Norman, Jack, Uccomal, CC, Tom, Glen, Andrew, Parker16, Francis, Mohnish and many more
I finally arrived back home again as I write these words.
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In case you're interested, I just booked a room at the Strathcona Hotel about 1 block away.
Room rate is $144/night. Never stayed there, so we will see how it is.
http://www.thestrathconahotel.com
I stayed there already last year and was completely satisfied with their value proposition. I usually never spend much on intangible goods and services, because it's thrown away money. I got my room in some bundle with plane tickets at expedia, so I paid much less, something below $100 a night for the room. A lot of other board members also stayed there. A comparable value would be the Bond Place Hotel near Dandas square, but it would be a little further away. Anyway,... there is some funny YouTube video about them, where in the end (at 2:40min),... the general manager and his assistant state that the Royal York is the best hotel in town, and they are only the second best choice, but in terms of price they bet them ;) http://www.youtube.com/#/watch?v=-5t1E1Mjtqo
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Probably best choices...
1) Interactive Brokers
https://www.interactivebrokers.com/
2) Schwab Global Account
(seems currently some new offering by them, and it's also a separate forex account)
http://www.youtube.com/watch?v=GW7c3BZn1iM
http://www.schwab.com/public/schwab/investing/accounts_products/accounts/global_trading
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http://www.fatwallet.com/forums/finance/1213147/
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What's up with the multiply.com website? By "closed", do they mean like a bathroom break and they'll be right back?
Eric,...
Your uploaded screenshot might only serve as a virtual gravestone. They closed the site completely!
Sadly it seems that all content from old MSN Berkshire Hathaway Shareholders Message Board is lost forever.
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Multiply Announces Closure of Social Networking Sites
http://en.wikipedia.org/wiki/Multiply_(website)#Multiply_Announces_Closure_of_Social_Networking_Sites
An official announcement by Multiply's CEO, Stefan Magdalinski, was made on August 9, 2012, that the social networking portion of Multiply would be discontinued, including hosted blogs, videos, photos and messaging, in order to focus solely on e-commerce. [18] Multiply International ceased its social network on 23 March 2013.
The closing of the blogging and file-sharing services harvested lots of protests from Multiply users. The users felt betrayed, especially because Multiply's management previously guaranteed that the aforementioned services wouldn't be eliminated even with the change of focus into e-commerce
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Multiply Shuts Down Blog and Content Sharing Service
http://news.yahoo.com/stefan-magdalinski-speaks-multiply-blog-221017054.html
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All old board members, including me can still remember the days as some evil puppets of them came to the predecessor board at MSN and StockHouse. There was some special guy named "brolgaboy", who was posting almost daily manipulative rants of hate against Fairfax, trying to drive down the share price... and usually a day later, strangely... the same verbal accusations appeared in articles written at TheStreet.com or other newspapers.
http://www.stockhouse.com/bullboards/messagedetail.aspx?s=FFH&t=list&m=5953317&l=0&pd=0&r=0
http://www.stockhouse.com/bullboards/messagedetailthread.aspx?sv=2&p=0&m=6133158&r=0&s=ffh&t=list
http://www.stockhouse.com/mystockhouse/viewmyallinfo.aspx?u=185348
http://www.stockhouse.com/bullboards/mypostlist.aspx?&u=185348
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You can surely add me for the Fairfax bus. I'm curious about your word "surprises" on the tour, and already wonder if we might get somewhere an unannounced unique tour guide dropping by accidentally. Hahaha,... only wishes, but who knows ;D
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What is the worst case scenario here? What if the stock market had excellent returns and the feds policies caused inflation to kick in ? What is the impact on Fairfax's portfolio?
If you are referring to the CPI-linked securities, FFH has invested a total of $454 million and sees a cumulative loss of $335 million to date: -74%. Not much damage left for inflation to cause!
This is how I see it:
- Best case scenario: a lot of people will lose a lot of money, meanwhile FFH will earn a fortune.
- Worst case scenario: 2012: a lot of people will earn 16%, meanwhile FFH will earn 6.5%.
giofranchi
“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes
I am referring to both the S&P hedge and the CPI-linked securities. Lets take a more plausible scenario. What happens to Fairfax's portfolio if say:
1, The market returns say 12% over the next 4 years
2, And inflation spikes up to 5% in 2014 and stays there for the next 5 years?
What happens if both those numbers are higher?
valueInv,...
you have to see it from another perspective. Because of the S&P hedging and the CPI-linked securities hedge shareholders are not receiving the returns on the equity portfolio, but are effectively receiving the delta between Hamblin-Watsa’s returns and the overall market. Based on my knowledge of HWIC's long term historical portfolio returns, I personally feel very comfortable with this delta return.
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I remember that Buffet and Ed Thorpe (the guy who actually came up with "black scholes" as well as how to count cards in blackjack) discussed non-transitive dice when they first met. Here is a short discussion of the dice, his conversations with Buffet on the matter, and some of the implications:
http://edwardothorp.com/sitebuildercontent/sitebuilderfiles/bridgewithbuffet.doc.doc
Thanks for posting this document. Haven't looked in a long time at Thorp's site. Only knew some references in Fortunes Formular or Ziemba's Kelly book with certain remarks about Thorp's first meeting with Buffett in the 1960's something??? Thorp said that he already knew that WEB would someday be the richest person on earth. Cheers!
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Call me a skeptic, but this Cyprus stuff seems to be a red herring. Why has the Russian government introduced itself into the conversation? Maybe this has less to do about the banking system and has more to do with the Russian underworld. Just a thought.
Cheers
JEast
You are right on the mark. About 33-50% of all bank deposits in Cyprus are of Russian origin.
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Cyprus bailout: British pension payments delayed
All future pension payments paid by the government to British citizens in Cyprus will be temporarily put on hold until least tomorrow (Tuesday).
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"More generally, I'm interested in knowing how to find the SEC filings for these, just to get my SEC-fu up."
You know you can search on Edgar? You've got to go back to between late 2008 for some and search around a lot but they're all there.
http://www.sec.gov/edgar/searchedgar/companysearch.html
This hasn't updated for some time but it's still online.
http://www.stockwarrants.com/about.htm
Yes, I just don't know how to search for the TARP warrant prospectus for each one (e.g., if I look up BAC, there are tons and tons of filings--how do I search just for the warrants?). I realize this is a newbie question, I just don't know how to do it.
Racemize,...
there you go...
http://www.sec.gov/Archives/edgar/data/70858/000119312510044940/d424b7.htm
I Worry About "The Shot Heard Around The World"
in General Discussion
Posted
Also some recap of Buffett's and Munger's thoughts on corporate profits relative to GDP from the recent Berkshire AGM.
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Q10, Carol Loomis: Philadelphia. You said in 1999 in Fortune Magazine, that you have to be wildly optimistic to think that corporate profits can sustain above 6% of GDP. Now they are 10%. How should we think about it?
WB: It is pretty unusual, profits are extraordinary as a percentage of GDP at least on looking back on history of US. What is interesting about it is that US business is complaining frequently about corporate income tax, and it is half of what is was 40 years ago as a percentage of GDP but profits are two times. I would take with a grain of salt any complaints about US corporate tax rates. US business has done very well. Inequality has widened, but businesses have done well. It will be interesting to see if levels can be maintained. Business has come back strongly from the precipice of 2008. Employment has not come back the same way. That will be subject of a lot of public discourse. If I had to bet on whether corporate profits would be 10% of GDP, with much of that is earned outside, I think it trends downwards, but GDP will be growing so it won’t be horrible.
CM: I wouldn't be too surprised if 6% is on low side. Just because Warren thought something twenty years ago doesn't mean it is law of nature. [laughter]
WB: We'll talk about that at lunch.
CM: Stocks are owned by endowments and pension funds. There is no [automatic] correlation between the figures.
WB: Is 10% too high?
CM: If rest of world keeps coming down, it will be hard for us to keep it up. I don't mind paying more, but would like to see corporate rates down.
WB: He's republican, I'm the democrat!
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Source: Transcript of the Berkshire 2013 AGM