gfp

Everyone can agree that when Sardar Biglari uses shareholders' capital to buy personal control of the public company for himself through a private vehicle he controls it is just disgusting and abhorrent corporate governance. When Prem does it we shrug and say, "we like Prem, we want him to have control." And I agree. I like Prem and I trust Prem and I want him to have control, despite that also meaning there will never be a change of control premium for Fairfax investors.

Fairfax owns 49.9% of The Sixty Two Investment Company Limited, purchased in 1992. (https://www.fairfax.ca/wp-content/uploads/1992-Letter.pdf)

Just as a small nitpick, Prem controls the 1,548,000 multiple voting shares but only economically owns 748,770 of them. The other 799,230 multiple voting shares are economically owned by Fairfax indirectly.

For those wondering which security Marco Van Basten is referring to -> https://www.sec.gov/Archives/edgar/data/2022545/000035419025000041/xslF345X03/form4.xml

Yes I agree with that and will add that if there is a downturn that produces prices Berkshire would be interested in, interest rates will be low and Berkshire will use leverage to do whole-company acquisitions. Not for preferred deals but buying operating subsidiaries. And anything large that Berkshire tries to buy will take long enough to close that Berkshire will generate another $20 or $30 billion in cash while it waits for the merger to close.

Yes

Were you an active investor in 1998-2000?

We hit $1570!

I think a lot of those operating earnings are coming from the capital you are putting to the side, including the ability to run one of the largest insurance operations in the world. Cash was $358 Billion at quarter-end, so don't get caught up in the $382 Billion number. A lot of that cash is going to stay put or become "bonds" and never get "spent."

I think at the Q3 run-rate we are currently at 19x operating PE. They don't have "nearly $400 billion" in excess cash if that is what you are counting. They certainly have plenty of debt capacity, cash and securities to liquidate to buy anything they want. And they probably will not buy much of anything.

I watch them here https://www.youtube.com/@JordiVisserLabs

Had a hard time getting the page to load but I think it's Fed standing repo facility you are linking to. Basically what they came up with in 2019 to replace the "discount window" which had some kind of stigma attached to it. Maybe they will bring back BTFP! Can't get much better than that! Seriously though, conditions are tightening up and a lot more MBS are being posted as collateral vs purely treasury securities. I think big money center dealers are probably on a bit of a risk-off mood at the moment. Unlike many, I don't think it is directly tied to the sub-$3 trillion of reserves being too low but I'm sure that's what the Fed will assume

https://www.youtube.com/watch?v=tTILlqoJ1uc Good talk, recommended on Jordi Visser podcast

One thing Berkshire has been doing lately is removing some of the excess capital from the Insurance subsidiaries and distributing it up to the holding company level. It started with BNSF being distributed out of Nico up to BH parent and I figured that made sense - bulkheads and such. Plus insurance regulators were not giving Nico capital credit for anything close to BNSF's economic value. They essentially valued BNSF at book value from the acquisition price plus income minus cash out distributions. Then last year Berkshire took a bunch of capital out of the insurance companies but it seemed plausible that it was just related to paying cash taxes for the Apple sales and stuff like that. But you can clearly see the capital building up at the holding company level -> ----

Yeah, the July 21st figures seem to be a clerical error. June 30 figure (right after Warren did his big conversion for the year) seems to have been correct. Sept. 30 and Oct. 20th look correct as well.

Didn't see any direct disclosure on price paid for Bell Labs acquisition but it looks like Goodwill increased $339 million for business acquisitions. Hard to know what other small bolt-on acquisitions during the quarter might be in there but I assume most of that would have come from Bell Labs. They definitely paid cash, not stock, and there isn't anything in the cash flow statement for business acquisitions. Must be lumped in with "other" or "equity purchases"

Here come the bogus headlines from the journalists who skip the liabilities section..

(I'm not Bill, but here is my 2c) Their rule of thumb is based on a certain percentage over average daily Fedwire volume but in reality the level of bank reserves doesn't matter as much as the Federal Reserve seems to think it does. Basically, they gradually shrink reserves and then something happens and then they say - "gee, that level must be a little less than "ample" - when in reality it is tightness in bank money, not reserves, that causes the bumps in the road.

No way man. Can you imagine me running something called "Hudson Value Partners" ?

poor old coot is so out of it he doesn't know what day thanksgiving is

AJG results out. Market doesn't like 'em so far https://www.prnewswire.com/news-releases/arthur-j-gallagher--co-announces-third-quarter-2025-financial-results-302600340.html

There's a good saying out there for the early years of AI adoption - "you aren't going to lose your job to an AI, you are going to lose your job to a person who is good at using AI"

The charts I posted above used S&P 500 earnings per share, not the price of the index itself. Cigarbutt's charts look similar and capture the same dynamic but use SPX itself. The point is, employment is decoupling from corporate earnings in an interesting way that coincides with the very beginning of large scale AI adoption that is just in its infancy.

no that's Jordi. I'm very good looking but Jordi is not

AI will probably cause fewer jobs to be created before it outright destroys jobs on its own. It may be hard to measure "the hiring that wasn't" but pretty easy for entry level job seekers to feel. I saw a great graph the other day showing how for the first time, temp employment and Jolts hires both diverged from S&P eps after correlating quite well for a long time. I'll try to track down the chart.. Total earnings might look fine, as the lucky ones make a bunch of money. But the K shaped thing is real and getting worse Here are the charts I saw - not super helpful but I did track them down Above is Jolts hires vs. SPX eps This one is # of temp employees plotted against the same SPX eps line (different time scale)