Shane

Market goes down 30%, BRK down 10%. Yes you beat the indices. However you still have 10% less cash to put into opportunities that could go up 200-300% which amplifies the missed opportunities. If there were a near term catalyst then it would be a lot more attractive. Right now I see it as a long-term hold. I see a lot of trouble on the horizon and I think this market could give great opportunities in the next 5 years. It's all about demeanor I suppose.

Tombgrt - I do believe it is inexpensive at these prices, but not necessarily so cheap that I would gobble up shares and risk missing even better opportunities. Why take 15-20% off? Well you bring up good points, I must admit I am rethinking my reasoning. I want a margin of safety. I think there is a good chance Bonds / Cash will likely provide negative returns in the future. The argument is that Buffett can turn cash into great investments in a recession... Well he didn't invest enough of it in 2009, I would have put all of my cash in. He is better than me, no doubt, but I can get in and out of great investments while he is too large to do it now. It basically comes down to an opportunity cost, and I want a fat margin of safety to investment a huge amount of cash into anything right now. Bull-market: BRK likely underperforms and I regret putting a huge amount of cash into it Sideways market: If I have no cash I miss out on opportunities Bear Market: My BRK investment goes down (less than the market but still down) and I miss great buying opportunities. Over very long periods of time BRK will beat the market, agreed. I just want to crush the market not beat it ;) Sure some of the shares are being forced to be sold, but with $200 billion invested in it I estimate it is a TINY amount. I realize I can sell BRK to buy cheap stocks in a recession but the loss I would accept would eat into the potential gains.

I don't really see BRK as such a screaming buy like everyone else seems to. I would take 15-20% off the investments valuation because you do have to assume you sell them on the day of valuation + I doubt he is really going to outperform the market going forward if there is a bull market and I'd rather have cash than BRK in a bear market. Why hasn't he outperformed the market? Because even a genius will have trouble investing that much cash! He admits it, the facts are clear... I just can't make much sense out of it. Don't get me wrong, I have a 4% position in BRK but mostly because I see at as a place to park cash when I can't find really exceptional investments but want to be in the market. I don't see it as a way to create lots of wealth anymore. Personally I'd love to find a Jockey like Buffett if I thought he would keep crushing the market, MKL & FFH are really interesting to me but I am running into the same problem in those companies... to a lesser degree. Klarman said to look for forced sellers to find undervalued stocks... BRK is the ANTI forced seller stock. A huge portion of the stockholders know about his past and are die-hards.

twacowfca - I agree with you, S&P 1100 is just when things begin to look interesting to me... I don't think the market is really all that cheap. We've seen the markets go much lower than this, and although the catalysts that caused the last meltdown are not present there aren't any tailwinds either.

I bought in today, after going below book I just don't see much downside. I honestly cant predict the upside but it's free IMO.

Congrats on the shorts Harry, Hope all is well my friend! I certainly wish I had some shorts in this market.

I do not have a thorough write-up so I am not posting this in the investment Idea section, but would like to hear anyone's opinion if they care to share. I'm woefully low on time right now... Studying for the CFA at night and interning during the day. My watch-list is uncomfortably small but 20% of my portfolio is in municipal bonds that mature very soon. After reading IBISworld's industry analysis, and Value lines research report as well as a few articles I'm beginning to get interested in ADM. Also my broker is a big proponent and Buffett recently said they are of interest to Berkshire. Recently they missed earnings projections due to $380 million in what they call a one-time expense and the market hit the stock pretty hard. As a manufacturer of agricultural products they seem to be at risk of commodity prices in the short-term, but are capable hedgers and most analysts think their pricing power is exceptional. They invested more than $5 billion in growth capital expenditures and historically have returned fairly well on investments like this. It currently trades near book value. Does anyone see a competitive advantage for the company? They sell unbranded products and the main barrier to entry seems to be reproduction costs and location. I don't really fully understand their pricing power, but it seems their margins are healthier than others in the industry. I see food costs going up from here and if I am able to wrap my head around how they will pass these costs on to their customers I'd probably pull the trigger on dips. I really like that the market they buy from is highly segmented, but prices of commodities are set by the market... do they have negotiating power? Similarly their customer base often has healthy margins but is that because they can push ADM down on price or will that indicate they can stand to lose a little profit margin at the benefit of ADM? Food for thought for anyone who would like to share their opinions. I wish I had the time to look deeper into this!

I can't really take a guess, but I'm pretty worried about it! 25% of my assets are in gold miners and they have been a disappointment thus far. I started loading up in 2009 and stopped late 2010, I thought some of them would be 6-10 baggers and just haven't gotten anywhere near the return i had hoped for. A QE3 announcement would be a blessing!

I'm sure there are great bargains available now, but a 10% drop from these levels didn't trigger me to buy. If you believe GMO's forecasts then the market was priced for very small returns over the next 7 years. S&P 1100 would get me to call in sick from work to do more research though lol

I think a lot of small companies with moats are likely to be private. American Panel is a company which makes walk in freezers that Berkshire Bought (I tried to sell them insurance last year and they told me, from the CFO). They almost have a monopoly in the south as far as I can tell, and have no need to go public. They never needed to raise capital so their only real incentive would be for the manager to sell their shares... So I think most moat businesses will outgrow a small market cap or will be closely held. If you can gain access to a wide moat business for cheap it would obviously be very smart to load up, and there are plenty of eyes out there trying to find them too so the odds are it will be fully priced.

I apologize for my delayed response. oec2000 - I have added them to my watch list, thanks! Ballinvarosig - I am considering trying to get into the industry as an agricultural analyst - My undergraduate background is in the plant/soil sciences. I have looked at those firms and was not very impressed. I am really looking for a company interesting enough to analyze so I can send out my work to various funds to get my foot in the door for an interview. I've noticed its much easier to get the call back when you do this. Gopinath - I've been looking at fertilizer firms for this reason, I just can't find attractive publicly traded operations. Packer 16 - I am aware of them, they are a day drive away from me! Roger & Hester - Commodity traders are something I know next to nothing about, looks interesting but probably over my head!

I've had an interest in working on creating some analytical reports on farmland companies and Agrochemical stocks. My background is in soil chemistry / Plant sciences / Environmental sciences and I am interested in applying that background knowledge to investing. I've been compiling a list of companies which I think are worth analysis and it is quickly growing, I'd love to read what experts think of various companies as I might get insight I did not already know. Does anyone know of a blog / source of commentary by experts on agriculture investments? I have 2 main goals: 1. I'd LOVE to get farmland as it involves very few assumptions, but I've been unable to find much (CRESY, AGRO, BWEL.PK) 2. Find the lowest cost producer, of any size, of Potash or unique firms creating Nitrogen based fertilizers. Nitrogen is worrisome because it is created, using fossil fuels. There is not as much of a barrier to entry there as other firms could create new plants, I'd love to find someone with a patented process here or with a unique method which would be hard to duplicate (UAN for example). Hopefully someone else here is interested and knows of some resources!

I came to the same general conclusion VAL9000. twacowfca - That is a good point, if management were maybe more dubious then the margin could return to normal. Interesting point to ask management!

What metrics do you all find useful in determining pricing power? Here is an example: I have found a micro-cap snack foods company which has had it profit margin halved between last year and this quarter. That was kind of expected for me because commodities had a run and they likely don't change the price of their goods on a quarterly basis. However comparing that with Kraft, the profit margin actually increased. The manager of the micro-cap is likely to take my call, however KFT is not going to. Can anyone point me to an article which could give me guidance on what investors look at when determining pricing power? My first guess is that because the micro-cap is not in industry leader it is just matching the prices of the established brands and maybe had larger costs, however, if they management is just slow to act then it would be a good buy at 5x FCF with a long history of growth...

Thanks for the kind words!

CapitalistCollective, Can you please tell us a little more about your fund and your investment philosophy? Also what about a little bit more about yourself, how long you have been in the industry and what you have done prior to the fund? I hope I am not being intrusive, this is just an unorthodox method of finding analysts and I'd like more information.

Given the energy conditions I saw more upside, but was spooked by watsa and ross selling. That's really why I say it hurts, of course if I could get returns like that everytime I would be very happy!

Interesting food for though, however, I simply prefer to spend my time picking stocks. If I won the lottery I would pick stocks with my winnings, It's just something I find gratifying I suppose. Maybe when I am confident I know what I am doing a will lose interest (I doubt it very much), but for now I just find it exciting to find new information and try and apply it. As an M.S. student I was constantly staying late in the lab to finish everything in time because I would 'waste' so much time reading about my investments... I just thought maybe I should do what I want to do instead of what I was always supposed to do (My family business is environmental consulting, I had always been expected I would end up there).

Some interesting things I have learned from modeling is that it allows you to identify the assumptions being made in the current stock price, which could help you identify if something is out of whack or identify I great short. It's probably not needed if your highly experienced, but if you have unlimited time would not hurt.

Myth - Retail and Institutional investing are two different worlds. You seem like you would fit in much better at an institutional firm. Basically, the difference is the level of knowledge your client has. Institutional funds are being chosen by highly educated fund of fund managers which are intelligently comparing your long-term performance, they are much less likely to be concerned with your dips in performance in the short term. We tend to idolize retail fund managers because they are in the lime light, the firm I just applied for was in the top 1% of Large-cap value managers in the most recent 10 years... I would never know they existed had they not been located next door to my church back home. Similarly there is another fund whom is rated 5 stars in the small-cap value by morningstar 2 hours from me, they manage less than a billion and are largely unknown. Even people in the industry in their town of operation have no idea, unless the specifically look them up. They don't do interviews, don't take on many of the clients who apply to their fund, and don't manage enough to attract attention!

shane, if you don't mind me asking, what firm did you interview with? I'm not very comfortable sharing that information sorry, I am hoping that they will keep me in mind for future positions and don't want to risk having that information out on the internet. It was a institutional firm with $7 billion in assets, I doubt many people would have heard of them though.

I didn't get the job, It is encouraging to get through 297 applications... in the end they decided to go with someone else. Looks like I'm back at it again.

Thank you, If I don't get the job I will be back on the search. Still in contact with two other funds who hopefully will allow me to do an internship if the job falls through.

Thank you! I actually had a conversation with a friend last night regarding how one can make a difference in the world. I think maybe sometimes people determine one's role in life by their job. If I were able to accrue significant wealth in the future I would most certainly feel great satisfaction doing something positive with it. Be that investing in a new technology I think would have a positive impact... or donate to a charity I trust. Even though my career might not add much to the world, what I did with the earnings from that career could be tremendous... In fact if I were a lazy environmental scientist because I did not like my career I would argue that I would be unlikely to contribute much at all!

Anyone know of a blog who has an affinity for dividends?