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gfp

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Posts posted by gfp

    why not sell put options to add to a position?

    in General Discussion

    Posted

    Buffett also used short puts to acquire a bunch of the original BNI.

     

    Assuming they are cash covered, you are risking your great purchase idea going up while you make a couple of bucks and watch from the sidelines.  Writing puts on companies you want to own at the strike price is a fine way to generate income, but can obviously leave you with a bunch of stock and no cash in a downturn.

    Prem vs. Warren

    in General Discussion

    Posted

    Just trying to spark some interest.

     

    I gag everytime I see the LVLT thread pop up.

     

    Its ok to take a side by the way - I won't tell either one that we like the other one better.

     

    I like BRK b/c of its diversity, b/c of its crappy home "building" businesses that will someday produce some nice $$$, and b/c of the railroad.

     

    What I like more than anything is all the cash Warren will have to play with, and the FCF that is going up and up and up.  

     

    Every time I think about looking at Coke or PG - I end up at BRK instead b/c he owns some in the company plus a whole lot more.  

     

    Still hoping Warren spins off Dairy Queen - I hate that business.

     

    What do you hate about Dairy Queen International?  I'm sure you know it's a licensing / Franchise business...  Expanding into China, Egypt, Macau, Saudi Arabia, etc...  Very little capital employed in the business and the dough keeps flowing up to Omaha with little need to reinvest a cent.  Plus it's minuscule inside Berkshire.  

     

    31.7% return on capital employed when we purchased it.  Year after year...

    Prem vs. Warren

    in General Discussion

    Posted

    I've been picking BRK over FFH at recent prices, so far not even l'affaire Sokol has allowed the purchase of BRK shares at below 200 Billion market cap.  With the annual meeting around the corner, which includes pre-release of first quarter earnings, and most of Berkshire's Japan exposure coming through their Swiss Re quota share agreement - folks might actually start to focus on the business again.

     

    Gotta love that the 1.64 Billion Goldman windfall this quarter will be taxed as a preferred dividend due to the clever structuring of the product.

    Munger speaking at Ross School of Business (Video)

    in Berkshire Hathaway

    Posted

    I know that's from a while ago, and I've seen it a few times by now - but listening again I hadn't caught his comment on predicting coming disappointment among universities that all invested in timberland at the same time ("they all purchased in the same groves").  There was a similar sentiment expressed in one of the Heilbrunn Center for Graham & Dodd Investing newsletters, where the 'short' winner of Ackman's pershing square prize was a timber reit short.  (the long winner was BR)

    More on Andy Kilpatrick's New Book

    in Berkshire Hathaway

    Posted

    I recently got the new book too - and it is really nicely done.  A great buy for those that appreciate the minutia of what Buffet is up to.  You get a real sense for the insane amount of energy he still has.

     

    It was interesting to read the details of a few of his previously undisclosed Korean equity positions:  "Buffett said that Berkshire had bought shares of Kia Motors Corp., Shinyoung Securities, and Hyundai Steel in Korea earlier but now owned only shares in POSCO.  He personally held one additional Korean stock in his own portfolio."

     

    Has anybody checked out a price chart of Kia Motors recently?  It's, um, up and to the right...

     

    My favorite typo / "damn you auto-correct" moment so far is on page seven where they refer to Michael Milken as "former punk band king".  Rock on.

    The "CAWn" Game Continues - Biglari Holdings

    in General Discussion

    Posted

    Maybe I'm mistaken, but I thought they were not convertible - i.e., unlike BRK you cannot convert BH class A into BH class B.  I know his reasons for the dual class voting are shady, but it doesn't sound horribly different from the voting rights disparity at BRK.

     

    (I am not defending his actions, I really dislike this guy)

    Tilson's IV Valuation of BRK

    in Berkshire Hathaway

    Posted

    Not that it really matters, but why does he use the wrong share count and the wrong Shareholder's Equity?

     

    Tilson's BRK shares outstanding: 1.636 million

    Actual BRK shares outstanding: 1.6486 million

     

    Tilson's BRK equity: $163 Billion

    Actual BRK equity: $157.3 Billion

     

    Using $163 B ignores the 5.6 Billion that doesn't belong to BRK shareholders.

    David Sokol Interview

    in Berkshire Hathaway

    Posted

    To compare what he did to Munger is just wrong. Sokol obviously knew that Lubrizol was up for sale, and that in the event of a takeover, he would stand to profit very handsomely.

     

     

    Lubrizol was not "for sale" anymore than every public company is "for sale" on any given day.  It was on a list of chemical companies, not a list of chemical companies being 'shopped' by Citi.  LZ was, in fact, considering a very large acquisition.  It was arguably undervalued and fairly un-leveraged, which would make it a target - but the company was not being shopped and the management was not considering a sale.

    Berkshire Wrote Down U.S. Bancorp, Swiss Re After SEC Query

    in Berkshire Hathaway

    Posted

    What exactly is the latitude given by the FED to companies regarding stock ownership. I always tough that stock had to be marked to market...

     

    BeerBaron

     

    All the equities were always being marked to market and all changes were reflected in quarterly comprehensive income and, of course, book value on pg. 1.  Berkshire isn't a trader using mark to market accounting and it shouldn't have to pass unrealized losses through the income statement if there hasn't been a material permanent impairment (like AIB) just like it doesn't pass unrealized gains through (besides rare exceptions like the Gillette-P&G merger and the BNI write up).

     

    If KO goes up 2 Billion dollars in a quarter and USB declines 500 million, running -500m through the income statement doesn't communicate anything useful to investors.

     

    Japan ETFs

    in General Discussion

    Posted

    The only Nikkei 225 etfs that I know of are traded in Japan - the iShares one is jp:1329

     

    EWJ, that you mention, is the most liquid US etf, but it tracks the MSCI Japan Index.

     

    There are mini-Nikkei futures traded in Singapore and larger contracts available in the US.

     

    DFJ - the WisdomTree small cap dividend etf is also pretty active.

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