Sweet

What has been his performance over time? Some interesting rules of thumb in there - liked the idea of fcf yield +growth will equal your return roughly. Disagree with some of the industries he says away from - insurance and banking I think are more predictable I think, although there are times you need to hold onto your ass.

How does thinking in risk-adjusted terms help Berkshire shareholders outperform? Unless you the investor uses leverage to buy Berkshire on margin to risk match the SP-500 what difference does it make to say risk-adjusted? OK, I get it, close to retirement, more stable business etc... what of the rest of us not close to retirement just looking to compound as fast as possible?

I don’t think owning the broad market at these multiples will return 10% per year either. However I am relatively sure that the permabears will perform worse, barring a major correction. I do think places will perform significantly better than 10%, I’m thinking areas where new technology will revolutionise.

Depends what your goals are and your age. 5% is a low return but it is a return and not a loss. For people on the cusp of retirement it makes sense. For others, and I’d put myself on this category, it’s something to own to tick over until you find something you can swing hard at. For those thinking they can retire on that - good luck.

Great insight.

My view - Western countries should have been involved to a much greater degree and from much earlier. I think the West should close the sky in Ukraine to Russia jets. They should be operating artillery, operating drones, destroying weapon depots etc. No Western infantrymen on the frontline right now, Ukrainians should be the front line soldiers, it's their country and if they want it to remain free they should fight for it. But most of everything else on the table from the West. I'm OK with Russia keeping what it has if it is peace, and lasting peace, whatever. Russia should be prepared that Ukraine joins the EU, or even NATO for that concession.

Good luck trying to make sense of stocks using a 10% discount rate. Valuation is largely subjective, and I think it is fairly clear that very very few people are using a 10% discount rate, and haven't been for many years. My own mantra, posted in another thread, is that if you feel the urge to crank numbers into a DCF to check if it is a good investment, its almost certainly not a good investment. Buffett talks discounted cash flows, Munger said he has never seen him using DCF model even once. I do believe though there is no sense investing in a company at PE 25 with little to no growth, when you could just buy a treasury yielding 5%. I do expect valuations to rerate over time especially if GDP growth slows, but I would be surprised at a large crash.

I'm pretty sure that Seth Klarman's record has sucked ass since around 2010. That's 15 years nearly and he is one of those people vinod is talking about.

Things are not cheap, in some cases downright expensive, and I am having trouble finding anything I want to buy, but I don't see a bubble. That's not to say things cannot come dramatically lower sharply, because they might, but nobody can know.

Could be an energy guy?

Isn’t an appropriate benchmark the Nasdaq 100 then?

When you have kids a job that just throttles your free time is the worst. You never get that time back.

Can you let us know who the manager is in a few days? I don’t know who this is.

I wouldn’t invest based on these numbers.

I don't believe that Trump could not have gotten these companies released had it truly been a priority.

They are great businesses but no reason to think they will be released from conservatorship anytime soon.

Looks like the rise in capital requirements for big banks is going to be cut: https://www.wsj.com/finance/regulation/dimon-led-bank-ceos-to-fend-off-tougher-capital-rules-b647756d#

No question there is further pain, write-downs on property, defaults etc. However vacancy rates are not staggered consistently among properties, it’s the old commercial buildings that have highest vacancy rates, new ones less so. As ever quality will matter. This article highlights some of the differences and where the squeeze points are: https://www.brookfield.com/news-insights/insights/misunderstood-us-office-market This could be a slow car crash that continues for a couple of years. The refinancing of debt seems to be an average of 5-10 years and many of those loans will need refinanced at higher rates. So I get it. It’s not a slam dunk. However I suspect there is good money to be made at these prices. A 50% + drawdowns in any sector is rare and it’s worth considering whether the pervasive doom and gloom is justified. I mentioned above, some of these REITs are trading at 08/09 lows. Is it really that bad out there? My back of the envelope bull case: - office work is not dead even if wth is here to stay at some level - excess inventory will get wound down and the supply problem will fix itself in time - companies will default and fail but overall I think we will muddle through No position btw. Talking out loud.

What if we have already seen the big wash out? We are four years into this bear market. And as you hint at, extend and pretend might work. If the excess supply of commercial real estate is taken off the market the demand problem will solve itself.

Is anyone here looking at office REITs or commercial real estate more generally? I think it’s worth exploring the pros and cons of making a longer term bet in this space. It’s the one sector that hasn’t had a post pandemic bounce. I keep hearing people saying there is another shoe to drop but there is a decent chance we are close to a bottom. Banks are rolling debt tied to office buildings rather than eating the losses in the hopes the sector turns. Some of these office spaces are being sold for housing development. Other buildings are being sold at a huge discount. But I have to ask how much worse can it get here? If you think a lot worse why? Rate rises would be bad, AI is possibly a drag, another recession would certainly be bad in the short term but ironically good long term (see below). I know of those office jobs will never return again but I don’t believe office real estate is going to stay empty forever. I also think the working from home trend will reverse when the labour market swings in the favour of employers again who demand workers return to offices i.e. recession and rise in unemployment. I was looking at some REITs that specialise in office real estate. Boston Properties, Inc. (BXP) are Kilroy Realty Corporation(KRC) are trading at 2009 lows - that’s compelling to me. https://finance.yahoo.com/quote/BXP/ https://finance.yahoo.com/quote/KRC/ I found during the oil bust that it’s often better to pick the higher quality plays. Alexandria Real Estate Equities, Inc. (ARE) is at 2018 prices and about 40% off the highs. https://finance.yahoo.com/quote/ARE/ Plus you are getting decent yields on these which reinvested might make for good returns. I’ve only just starting looking at this and i’ll post more thoughts are I dig in further.

Not as much now, the girls have been replaced by the babies!

The metric might be true when you add in all the luxuries of many households. Some households are of course struggling but I’m not referring to them. I used to hang with a bunch of guys in who earned broadly the same as I did and who managed to spend their entire pay each month on girls, drugs and drink. I was saving about 70% of mine. Today those same guys are still living paycheck to paycheck with little to no savings all as a result of their own choices then and now. Paycheck to paychecj in 2024 is not the same as it was in 1984. If this is supposed to be some metric of how terrible the economy is doing, or if the rich - poor divide, they can suck a dick.

Is it Chubb? I’ve not seen anyone predict that, not on COBF or financial media.

Interesting article from John Huber about big tech capex and how it may impact future earnings: https://basehitinvesting.substack.com/p/big-tech-capex-and-earnings-quality