gfp
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Posts posted by gfp
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I do think the impact of the short report was evident in the increased line by line detail on what the valuations were on each balance sheet mark. A lot more detail than prior years and the intent was obviously to show that these valuations are not crazy reaches.
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h/t to kingswell newsletter for highlighting Charlie's memorial service at Harvard Westlake School - Mohnish appears to be the only attendee to post selfies from the event -
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8 minutes ago, petec said:
If Fairfax doesn't exercise the calls, the other owners can force an IPO or (in some cases) a sale.
Prior examples would suggest there is a formula; no, we don't know what it is.
The idea is that the pension plan partners won't get stuck with illiquid and unsaleable stock of private businesses. They aren't ever going to IPO or force a sale of a subsidiary but the language is there to protect them. It really is just preferred equity pawn-shop behavior with a friendly partner.
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look at all those green candles - what a crap short sale
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I don't think Berkshire needs to fill Charlie's board seat since he was not an independent director and Berkshire already had two additional "vice chairmen" (a role that is also not required). But this article got me thinking that Don Graham would probably be a trusted addition by Warren and Berkshire's business with Graham Holdings is concluded as far as I know. Bonus points that Graham is not a fund manager, as the BRK board is a bit heavy on that particular profession.
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CIBC raises FFH target to C$2000 from C$1700 fwiw (not much)
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35 minutes ago, Blugolds11 said:
I agree, I would love to see the equivalent of Jon Stewart Daily show but for finance, Make fun of both sides, call a spade a spade, entire show is basically making a mockery of the hypocrisy that is so blatant. There certainly wouldnt be a lack of targets or material to use. Something that illustrated our own personal monologue when watching all these jokers who are self proclaimed industry "experts".
I guess the closest we have is Matt Levine's column at Bloomberg. Usually pretty hilarious.
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11 minutes ago, anshulpuri54@gmail.com said:
yeah if you email them they will send a copy. Its an awesome read.
Awesome thanks - they obviously hired a talented designer and put a bunch of work into producing it. I figure somewhere there is a big stack of them.
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Yeah, I am definitely not advocating for borrowing against Berkshire or any other stock with margin debt (despite the fact that I sometimes do it - but I'm a big boy and I understand the risks). There are other ways to add leverage to your financial life that are far less dangerous for those that are impatient or whatever.
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36 minutes ago, ValueMaven said:
Stupid idea - but what if FFH liquidated its $16B equity portfolio, and tendered for 2/3rds of the company outstanding shares ?
Yes - you'd have serious taxes, but you'd get a huge spike in BV, EPS, and Float per-share. Plus you'd have massive income generating from the bond portfolio.
I don't think the insurance companies have that type of dividend capacity to send the money to the holdco for repurchases. And, of course, you couldn't successfully tender for 2/3rds of the stock at current prices and get it (or much at all).
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On the subject of Buffett and debt and Berkshire board members making well timed moves with the stock...
In 1976 Warren convinced his Mother to sell her 5,272 shares of BRK.A to his sisters Doris & Bertie for $5,440 plus a $100,000 note (to Mom, not the bank or margin). They each got 2,636 A-shares at about $40/share while coming up with only about $2/share in cash. 95% leverage. Kind of puts his stories from this year's annual letter about his sister being one of the greatest investors of all time all on her own into perspective.
Charlie Munger did a similarly well-timed masterstroke of estate planning near the absolute bottom of stock prices in the GFC - he got 2,000 A-shares out of his estate, sold to family members in exchange for a promissory note. On 11/20/2008, with BRK.A at $77,500.
https://www.sec.gov/Archives/edgar/data/1067983/000118143108063602/xslF345X03/rrd224408.xml
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The first Laguna beach house was $150k and I think Warren paid in cash. He had recently shut down the partnership and that gave him $16 million cash but he pretty quickly spent every dime of it buying shares of stock (and presumably the Laguna house). Then he ran out of cash and had to live on only the $50k annual salary Berkshire paid him and some fees he earned from running a pension fund for FMC Corporation (a sort of favor for a friend).
A few years later, Warren paid $300k cash for Howie's first farm in Nebraska. Howie paid Warren rent. I'm not sure if that farm was mortgaged or not.
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I finally got it. Fairfax India is having some website issues. This is the full AR not just the letter
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9 minutes ago, Luca said:
Its uploaded in the Fairfax Letter 2023 thread!
I'm looking for India, not FFH
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Who's got the Fairfax India 2023 letter to upload? I can't seem to access it
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28 minutes ago, Munger_Disciple said:
BHE is named a defendant in lawsuit on real estate commissions:
https://www.wsj.com/finance/warren-buffett-is-getting-dragged-into-the-real-estate-commissions-litigation-79696153?mod=hp_lead_pos10I'm starting to feel sorry for the old guy. He reads all these newspapers every day - opens up the Journal: Apple fined $2 Billion, about to be sued for antitrust, Pacificorp wildfire verdicts, HomeServices, BHE sued for billions!, Haslam's screwing you! It's rough out there for the deep-pocketed.
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The best I can tell about the Japanese investments is that Berkshire doesn't actually take the JPY they borrow from the bonds and use that to buy the Japanese stocks. They borrow the JPY at the Berkshire Hathaway Inc. (BHI, parent, holdco) level and receive JPY and probably immediately swap almost all of it into US treasury bills. They pay the interest in JPY. Then, separately, they buy shares of the 5 sogo shosha companies inside National Indemnity, an insurance subsidiary of BHI. They transfer National Indemnity's treasury bills and some USD cash to Wallachbeth Capital to settle up their trades.
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It's kind of funny, @valueinvesting101, you got me checking into various depository / banking relationships for the BRK subsidiaries and Berkshire Hathaway Specialty (the newer, fast growing Excess and Surplus lines primary outfit) actually has a bank account at Paypal Holdings. Surprised me. Everyone has a venmo account I suppose
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1 hour ago, valueinvesting101 said:
Thanks a lot @gfp for posting this.
There are no depository from Japan on page 39 of this filing. Can Japanese companies be held without depository?
Also ICICI Bank, Mumbai India is listed as a depository with balance of 1,500. Does that mean Berkshire is holding investment in India valued at 1.5 Billion? I couldn't find any mention of Indian security in the filing. Is it related to Paytm holding which was liquidated earlier in 2023?Re: ICICI Bank, that is literally only $1,500 USD worth of bank deposit cash sitting in the bank.
I don't know where Berkshire "custodies" the Japanese shares but it is probably a division of Citi (or BNY). The shares are purchased using Berkshire's go-to large block trader, Wallachbeth Capital (which is who Warren uses for almost all large trades for the last several years). I have no idea which bank wires the JPY to Wallachbeth to settle up since the bank account balances are just shown in their US Dollar equivalents here. Maybe I could tell by looking at past filings right after a Yen bond sale was completed but I've never wondered myself.
*edit: I looked around and none of the Berkshire insurance subsidiaries have a banking relationship with a Japanese bank. I don't know what they are delivering to Wallachbeth to settle up or from where. Might come from Wells but the main National Indemnity Wells Fargo bank account pays t-bill-like interest so there isn't any JPY in there.
FWIW, as far as I can tell Ted Weschler tends to trade through this 'woman-owned' broker dealer - "Glen Eagle Wealth" https://gleneagleadv.com/institutional-markets
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1 minute ago, james22 said:
Searching COBF returns 1,501 hits for momentum and 347 hits for "Special Situation."
How many hits for FOMO (not counting this one)?
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2 minutes ago, keegomaster said:
The chart title is a bit of an understatement with positions up 120% to 260%
I assume the chart is translating back to US dollars but I didn't make it or know the data source. Chart source for me was https://www.kingswell.io
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9 minutes ago, valueinvesting101 said:
RBI bans IIFL finance from gold loan business due to regulatory violations
https://www.vccircle.com/rbibars-fairfax-backed-iifl-finance-from-sanctioning-disbursing-gold-loans
Like Deja Vu with IIFL securities getting in trouble last year. Glad FIH has sold some IIFL finance shares. We'll see if this one works out like the IIFL securities issues with a slap on the wrist.
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Just now, Xerxes said:
stunning, but Munger characterize them as “giving Warren something to do, so he doesn’t tinker too much at larger scale” (something along those lines)Well Charlie also had this quote on Warren's investments in Japan, "It was like having God just opening a chest and just pouring money into it."
I'm not even sure I can calculate the return on investment because the equity sliver was so small, the carry was so positive and the debt used to float the purchases and hedge the currency was so profitable. If we pencil in that we used insurance float for the tiny "equity" sliver then I guess this is as close to warren giving a master class on free money as we will get.
h/t kingswell newsletter for the chart
FFH 2023 Letter
in Fairfax Financial
Posted
Clearly we are back from the doldrums of exclamation point frugality