Sweet

I once had a fat gain on options which I was desperate to split across years for tax purposes. So I waited and exercised them. I ended up waiting too long such that any savings I might have made in tax was lost many times more in not just selling earlier. So it’s easy to make the exact argument you just made in the moment but it can be a mistake even just a few months later.

It’s not that it’s a ‘problem’ it’s whether it’s the best use of Berkshires money. Somebody else said on the board recently that Apple might be the new Coke for Berkshire - Spek I think. Fair enough. But the SP-500 has outperformed KO for over 30 years, and by a significant margin in the past 20 year or less. Apple isn’t growing much at the moment and sitting at a PE of 30. That 177 billion could be sub-100 billion if revenue or earnings don’t start growing again.

I don't think this means that the US is going to break up. I don't think it would be allowed to happen either.

I think the risks mentioned here, not the prescription, are about right: I remember Buffet one time said that the value of Berkshire would rise when he and Charlie dies on the prospect of it being split up. Not sure that’s true anymore - the value rising part.

Stopping the NWS does mean much. Sure it is a prelude to release, but it doesn't guarantee the shareholders get anything.

Trump had 4 years to get it done last time and it didn't happen and I don't think there is any reason to think it will be different. I had traded in and out of a position in this years ago, twice for small profits, once for a small loss. It was a gruelling lesson in not buying into a company based on a court case, as the recent Spirit Airlines merger has shown. It's just too hard to predict court cases, and its especially hard to win them when government are on the other side of the bench from you. I'd like to own the companies at low prices but I'm not holding my breath.

“Hikes to corporation tax and the National Living Wage are also adding to costs for debt-laden businesses.” That’s our supposedly conservative and supposedly pro-business government for you. And Labour, the higher tax party historically, are likely to be the next government - I guess they can’t do any worse.

Why would they need to know in advance it could be adopted or not? I’m sure these guys are trying new things all the time, some work and some do not. I never said they needed a back door. In any case, there have been plenty who thought it was truly anonymous and got busted.

Wouldn’t surprise me one bit if Bitcoin was created by a government to ensnare criminals paedos etc.

That’s not a fact, that’s a prediction. I’d take the opposite side of that bet.

Why does Berkshire have 50% in AAPL at a PE of 30 on flat revenue growth for 2 years. Sorta crazy to me. Great company but unless revenue growth reappears where do the stock gains come from in the next 10 years?

I’d argue in some respects you see that already. Public stock holdings are 50% Apple, a company with no revenue growth and a PE of 30. Great company sure.

I don’t understand how these companies aren’t very profitable businesses and why they continue to carry so much debt. Hard to invest when I can’t square that off.

Just use the 911 as your daily drive lol. Problem solved!

Yep, it’s why I don’t have a position in any of them yet, and may never. Avis gives a breakdown of its cost on average per car and you can work out roughly how much it is to replace its fleet. It pegs the costs at a long term average of $300 per car per month. Cars in Avis are replaced every two years. So the average cost of a car for two years is 300 x 24 = 7,200, before they are sold on. I think both these companies probably expanded very aggressively with debt, the payment of which drags.

These companies are going to be very interest rate susceptible given the debt they hold. I was looking at the Avis long term options, the pricing is terrible so I moved on. I then looked at the Hertz warrants which are just crazy instruments. They allow you to exercise them at $13.80 and they are good until 2051 - yes a 28 year call on the company. They benefit indirectly from Hertz buying back stock, Hertz have reduced their float by 35% since June 2021. The warrant is also structured such that if Hertz pays a dividend the exercise price of the warrant will drop too. Sure, if Hertz goes BK again you are probably toast.

Thanks for writing that up. Some of reminded me of this Charlie Munger quote: ”The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do – if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit." Not sure when he said that, probably 20-30 years ago. Did you have a number after which you eased off the gas a bit?

This begs the question Greg. How do you make your money? And how did you escape that?

Whatever you think of the debacle, I think we can all probably agree that Ackman’s Twitter feed in the last day has become very cringey. I just can’t take these Gladiator references

Interesting video, thanks, big issue here. Understand why the banks would kick it down the road, they are hoping for normalisation.

We bought for location, which I don’t regret, but the cost of our area is probably 50%-75% higher than comparable houses in other areas. So the house is a bit smaller than I’d like and so is the site, but it’s probably the right trade off overall - even if I get grumpy during Spring when I cant plant all the crops I want in the garden.

lol, I did smile at spending $350k a year and not thinking you’re rich comment Dinar. I wouldn’t even know how to spend $350k a year, most of it would just be invested again I reckon.

Get that. We gave four in ours at 1,700 sq feet. Think it depends to a large extent how many you’ve got in your house.

I think that’s a big house too, but I think it’s a big house anywhere. The best thing about American houses, at least the older ones, is they tend to sit on a good bit of land. My own house, I feel as if I’d like it about 50-100% bigger. Not to show off but just to have more room.

He’s definitely right but at what point does a basic house become a large one?