Shane

Investments per share might be similar, but I believe MKL has more equity investments per share and a willingness to invest proportionally more in equities. MKL is a better deal IMO at the same valuation. .9 vs 1.2 maybe not.

Yes for an investment today it is unnecessary, sure. twacowfca - Why? As businesses decline it is my understanding that WEB will run off as much cash as possible and reinvest it in new businesses, however, what if the capital allocator is terrible? Then this strategy breaks down and its best to just seperate the conglomerate. So I think it is pretty logical to want to dismantle the company should this happen. I am thinking decades from now.

I've read statements that WEB promises the companies he purchases that he will never sell them. Is this the case with all of his operating divisions? I ask because I wonder if 20 years from now, after WEB is gone, if management becomes weak can the conglomerate be split up to give shareholders a pick of the assets they want to own?

Maybe I am wrong to make the assumption, but how many quality $10m companies go public every year? Seems like slim pickings. Would you mind sharing one or two names of small companies with a moat that you follow?

I am a bit suspicious of this. How can a company have a history of meaningful growth and stay under $100 million?

If your profession is investing money, diversification becomes a comforting thought. Also - if you invest in a process like Graham and Dodd diversification makes a lot of sense. I have a 30%+ position but it's pretty hard for me to see so few risks that this becomes attractive. I am a worry wart.

Packer - Mind sharing your portfolio? I'm just curious

I'm up quite a bit this year, 20% of my portfolio was in BAC A warrants at $2.55.

Um... why don't you read the 10k and find out? Distressed debt is looking like a bubble to me, I actually have considered starting a short in HY ETF's. If I were to buy insurance companies right now I would want them to have as low of an interest rate risk as possible.

I think it might be important to look at these companies as investments per share. Alleghany: Price $331 Investments per share: $1066 Equity investments per share: ~$88 Markel: Price $430 Investments per share: ~$1100 Equity investments per share: ~$163 (Normalized maybe 250+) I would rather pay $430 for markel's investment portfolio than $330 for Alleghany's... Fixed Income is more of a risk than a long term investment in my eyes right now.

You bring up an interesting point. the "Buffett put" becomes less valuable but such a large buyback would more than likely benefit the LEAP holder via share price appreciation. I do find the trade attractive and think that some people are too focused on the verbage used. 1. We've got massive QE around the world through 2013, maybe longer 2. BRK is well positioned for the expected environment 3. WEB has made statements to set a weak price floor on the stock, barring massive corrections.

You don't need an MBA, or any specific background. Loosen your standards as to who you would be willing to work for... every fund will have a different culture. Your preconceived notions of the ideal culture may end up being wrong. The important thing may be to get your foot in the door. If you are truly passionate, things will likely work out. Keep plugging away. Read everything you can get your hands on. Obviously being stellar academically and establishing a personal track record will help. You don't have to go to an Ivy league, but go to the best school that you can (transfer if need be).

You can opt out of the insanity by moving, no?

I agree with everything you just said, but let me point out that it is already impossible for a 20 year old to legally have a handgun in CT. You need to be 21 to buy, own, or even apply for a permit to carry a handgun in CT. And it is impossible for anyone to legally bring a gun into a school in CT. These things are already illegal (he broke a ton of laws before he ever pulled the trigger for the first time), I don't know how you make them impossible (see my comments on drugs). A strip search or medal detectors to enter a school building? Turn our schools over to the TSA and make them like our airports? Come on man... you can go a few hours north or south and buy a gun... are you intentionally avoiding logic?

I think he has stated that BV no longer is a fair guage for BRK.

In all seriousness, I don't think it's such an asinine idea to consider upcoming events like the fiscal cliff. I'd love to sell a few securities that are closer to my estimate of intrinsic value in hopes of adding to my cheaper Idea's if the market moves down... Unfortunately I have to pre-clear everything and keep getting denied!!! I don't buy anything based on a 'macro' trend, but this dogmatic approach to not discussing it doesn't make a lot of sense to me. I know some great investors say they don't pay attention to the macro but how can they project earnings if this is the case? In a recession would you project revenue based on previous CAGR???

If we're going to include people's personal spending, their investing style, and their willingnes to follow Buffett into his worst mistake (Berkshire Hathaway)... then nobody. I think a lot of people will be great investors in the future and maybe beat WEB's record. I'd assume they have their own investment strategy, which may or may not be 'value' investing. I look up to WEB, especially in terms of his character. I doubt anyone will be able to live up to his standards.

It is certainly noble to spread the word about this disease. It is not fatal, but can severely limit someone's quality of life. I am sure those who have IBD appreciate everything the board & Fairfax have done to raise money. Fingers crossed that one day there will be a cure!

I think there might be a caveat here that some are not considering. If the person is an individual their savings every year could be a significant contributor to their investment account. If this were the case they might take a 15% position but know in a year it would only really be 10%... So maybe we should mention the general size of the portfolio? I will take a 20% position - but my savings come in regularly so I know I will have cash around to buy another big position in a few months...

Considering that BRK has a negligiable cost of capital due to their insurance operations, I think these are really very attractive businesses. They are in industries that enjoy some natural barriers to entry, but even among their few competitors they are now that much more entrenched because they have such low financing costs. In my view WEB is building a cash flow business that will provide money to his charities over time via dividends... I think he has been pretty clear that he won't beat the S&P 500 for inifinity. In that light, I think these acquisitions make a lot of sense. The reason he might consider the capex attractive is that he knows he will get x return on the capital he invests in capex, that will be independent of interests rates... so they may be more attractive than fixed income. I am of the belief that grain exports could be a major driver of our GDP going forward... I think that BNSF has a long runway of growth ahead of it. There is only so much railroad capacity out there and with environmental regulation only so much more that can be installed. The bigger companies will have pricing power in the future and that could be the source of FCF growth.

He registered in 2009, so he's been waiting for a long time to spring his hoax if that is the case!

I think Chuck Akre is a great manager. You need to look at his performance while at FBR & now at his own firm to get a real understanding of his CAGR. He takes large bets with a GARP style investment philosophy and tends to have a really long time horizon. I'll give some pro's and Cons I suppose. Pro: 1. History of outperformance 2. Heavily weights his best ideas 3. Simple and understandable investment approach 4. The few that I know who have met him highly recommend his ethics & character, overall a good person. Con: 1. Has not closed his fund in the past (Likely has not needed to) 2. Does not really stick to his small/mid-cap range as he likes large caps right now (I dont really care but some might) 3. Management fee a little steep for me but given his relatively small AUM I look past this

Thanks a lot guys

This article helped me see BRK in a new light. Maybe Berkshire Hathaway is an ingenious work of Financial engineering, and I think that he is actually widening its moat. Please don't let my using the phrase 'financial engineering' set the tone for my thoughts. I read a paper (Sorry I dont have a link) which showed that through regression most of WB's success can be explained by his cheap float and his insistence on steady cash flow streams, he didn't have to knock the ball out of the park to get above average returns with this cheap float (He did knock the ball out of the park anyways haha). This is similar to what Allen Mecham is doing with his cheap leverage owning BRK as a huge position. Buffett is now buying capital intensive assets that already have a competitive advantage by nature and increasing this moat by creating a utilities type company that will have by far the lowest cost of capital because of the insurance mix. This will allow his shareholders to count on those streams of cash long after his retirement. In addition to this he is creating a cash flow stream that also allows him to offset some risks in insurance allowing him to take long tail risk which others cannot, creating another competitive advantage. By offsetting insurance with these cash flow positive companies he might be increasing the moat of both businesses more than I realized. As a young guy I often consider BRK as a stock which I wont have to pay taxes on anytime soon that may one day contribute to my income, and if nothing else it will allow me to grow capital at a decent rate. Just throwing my thoughts out there

Can anyone recommend a site that keeps a running tally on multiple market valuation techniques? After seen Arnold Von Den Berg's presentation where he mentions the Valueline 1700 P/E ratio I've become interested in finding a resource to keep track of multiple valuation techniques. Does anyone know where a valueline 1700 P/E can be found BTW? I didn't see it on valuelines website, does Arnold make it himself (I think he might have mentioned that)?