Shane

Can anyone recommend some investors other than Joel Greenblatt that focus on this area of the market? I've recently read JG's book and am interested in finding other investors who've been successful in this space. I'd also like to hear about any great mutual funds that focus on the space. Thanks!

Terrible idea. You need to play almost the highest stakes available to be able to put 100K to work, and the odds that you are able to play at that level are close to zero. I disagree. My roommates in college were heavily into poker. To my surprise, they were able to consistently make money. They used a basic skills but entered into $5-$10 online tournaments with 45-90+ players and because so many players were so bad ended up making 30-90k a year. They would player 15-20 tables at a time and go in 'autopilote' only using basic skills and no intuition. I don't see why you would ever want to put 100k to "work", you can use the 100k to cover living costs while you played poker for additional income. At the $15-$25 game level only one of the guys I lived with was able to continue to win.

so?

I was referring to the price floor it might put on the stock, not the catalyst of getting wall street to realize anything. I actually dont see a meaning increase in coverage for sell side reports on Berkshire Hathaway since the announcement.

If you believe that WEB will support the stock price at 1.2x BV that adds value, similar to a put option on a bond.

There is no definitive answer to that, it depends on the assumptions. It is similar to a traditional IRA in that taxes are backloaded but you only get dinged once instead of at every transactions (Because the transactions are internal).

It seems to me that is still makes sense to hold BRK.A/B even if the company underperforms the S&P500 due to tax efficiencies. Does anyone else share this opinion or disagree? Due to the nature of my work I cannot invest in most stocks and am restricted on trades. It becomes difficult to find tax efficient ways to invest in my PA. Active mutual funds just don't seem to make sense. ETF's are relatively tax efficient but it seems to me some of these owner-operator congolomerates might act as a more tax efficent fund of sorts.

It seems to me income investing in the public markets is a tough game to play. If I wanted to generate income off of relatively small amounts of capital I would buy residential real estate when valuation was appropriate. The tax breaks are outstanding and the yields can be much more rewarding. I would only look at the markets for income if I had so much that it didn't make sense to go for private deals.

Have you looked at what's on TV? Divorce rates? Single and unwed parents? Acceptable drug use? A book that talks a bit about the change in culture is "Quiet: The Power of Introverts in a World that Can't Stop Talking." She goes in some depth about how, at one time, we were a culture of character (Buffett's generation and prior). Doing the "right" thing was championed. Now, we are more of a culture of personality (people like Kim Kardashian). Where we value what gets are attention compared to what's intrinsically motivating. No doubt the world is changing, as it always has. I think we are in pretty good shape if the biggest moral issues you point out are TV shows, Divorce rates, and Drug use. Think about the mass atrocities that have occurred in the past. No doubt they still occur today but I think a lot more is being done to prevent them.

I've always been confused by the notion that one system or another is destroying our morals. Looking back at history I don't understand how anyone can say things are getting worse not better...

Upon first reading this post I was inclined to want to disagree with you. On second thought good point.

twacowfca, I've followed you into this trade with in the money LEAPS. I'm wondering how your feeling about the LEAPS at these prices. At 1.4x BV and the market in the middle(end?) of a strong run, I am seriously considering selling the LEAPS.... however, the unfortunate consequences of making a lot of quickly are short-term capital gains taxes!

Most entreprenuership courses in college today discuss this point exactly. Great article

I think when to sell can be a pretty easy decision if you know the company. I model the company out with a conservative tilt when I am trying to decide to buy. When trying to decide to sell you should do the opposite. How well can the company reasonably perform? If that doesn't offer a good rate of return you sell.

BAM isn't huge if you only look at it only by market cap.... however, its a very large Asset Manager.

Berkshire is a very strong company, but they own a fair amount of cyclical businesses. In a deflationary scenario maybe they will hold up better than the average, but I don't think it will hold up as well as the hedges.

Uccmal - are all of the cumulative preferred tendered? Also - were the RBS prefs that you purchased cumulative? These a Prefs are available to call in june of 2013.

I try not to analyze the investment decisions of HWIC, other than looking at broad characteristics (Hedged). It adds value to my portfolio to have uncorrelated returns, I want him to think differently than I do.

It's a bit depressing to read, but I think what he discusses makes a lot of sense and I appreciate him laying his thoughts out.

Ann looks a little maniacal in the second link

as long as BRK doesn't pay a dividend and stays close to 1.2x BV I think the way to play it is as a stub stock via LEAPS. I'm up an enourmous amount thanks to twacowfca. If it is back down to 5% of 1.2x I'll buy more.

Ross do you know how the deal for Heinz was structured?

I guess I stand corrected.

I can't imagine deals like that ever occurring again. Too many people are looking at micro-caps. The market has certainly become more efficient since graham. Companies selling at less than 1x earnings?! unreal!

I've read notes on Einhorns short thesis. My understanding is that he thinks the ratings system is flawed and the government or investors at some point will abondone their support for this system. Does anyone have an opinion of whether this is true or not? Are the ratings franchises permanently damaged? From my point of view nothing has changed.