Valuebo

If BRK drops anywhere near 50% and as much as the market I will eat my shoes, film it and post it here! You'd get a company for $88.5b with $43.5b in cash (not counting buybacks), stocks worth $30-35b (1/2), $34b in bonds and a shitload of operating businesses of which a lot recently were acquired (BNSF $40b, Lubrizol $10b, ...). I am not counting on it. Maybe if the S&P500 drops to 300 and even then it would be crazy. I think it's laughable that many "professional" commentators think that with this buyback program, Buffett is effectively saying there are no bargains in the market. Didn't he buy for $3.6b in stocks in the 2nd quarter, invest $5b in BAC and buy Lubrizol at a decent premium from it's market quotation? That's almost $20b right there, more than 10% of Berkshire's current market cap, that he invested mostly when prices where higher than today. There is absolutely no logic in what they are saying. This announcement doesn't even mean they HAVE to buy back anything, it just provides the opportunity. Sorry for the rant, I'm just stunned by Mr. Market.

Yes, I posted this on another thread as well. You'll laugh with this: http://www.telegraph.co.uk/finance/economics/8792829/BBC-financial-expert-Alessio-Rastani-Im-an-attention-seeker-not-a-trader.html Nothing more but the average Zerohedge visitor, as suspected.

Liked it a lot, worth the wait. ;D Let us hope Prem isn't proven right this time and that we can continue deleveraging without a big bang. Reminds me if have to finish 'The Great Depression: A Diary'! Interesting to note how much faith he is putting in the management of many of his investments like BoI, RIMM and DELL. I keep thinking about that excellent paper on UU investments posted here some time ago when I hear Prem talking about his deflation bet and such investments with many unknown variables.

I agree bmichaud. As I have stated in another thread I'm not the biggest fan of Tilson but his basic thesis for a lot of his picks makes a lot of sense. I think here too he will be proven correct. I disagree with the conclusion being made by some now that Buffett doesn't see (any) value in the market. He is hunting $5 billion+ elephants, excluding all without competitive advantages etc., excluding things he doesn't understand like tech,.. and he IS adding in his current and new stock holdings. What is he supposed to do, buy $20 billion more in banks? It's just a luxury problem really. I love those charts. Used them a lot as well whenever someone was talking like Buffett wasn't here anymore already. The chances are getting high, very high, but there is also almost a 25% chance that he lives another 10 years. No guarantee, but imagine what could happen in 5, let alone 10 years! The longlivety of other value investors gives hope but I wouldn't take it into account. And sadly some leave us way to soon, take Peter Cundill for example. But yes, he is definitely making serious moves to a Berkshire without him.

http://seekingalpha.com/article/296012-berkshire-hathaway-s-new-share-repurchase-program-and-what-it-means Tilson's take. Outperformance seems almost obvious to me over a 1 year period. The question is by how much.

They haven't. I asked if they had any idea yet and this was the answer I got: We transcribed the interview, and send back to Mr. Watsa to check the quote. :)

- Why would we focus on market average valuations for determining value? It can be an indication but in the end the stock will sometimes be over- (mid 1998 & 2007 for example) and undervalued (2000, 2009 and 2011) just like any other stock. - Do we need a catalyst at such prices? What is the likelihood of BRK being strongly undervalued for more than 5 years and what else but opportunity loss would you actually lose? Is it worth trying to time the market's behaviour? Not that I believe you are, I just don't agree with any need for a catalyst when buying companies of this quality. Somehow people think Mr Market will suddenly be more rational towards Berkshire's future stock price, that Buffett will remain hated and that the markets won't turn manic again some day. (Not that I will wait for that day to sell my shares, there will be plenty of opportunity before that happens.) Just trying to get some insight in other peoples reasoning. I appreciate each and every comment here. :) Then why would you fall for the pitfall of trying to time such an event? It's just silly and not very value like imo. Timing seems hot lately, both for individuals stocks and the macro situation, and I don't get it. What if Buffett is at the helm for another 5 years or longer and IV nearly doubles before the stock takes a hit from this event? It's just not a valid argument imo. If we do drop 10-20% because Buffett suddenly resigns then I'll just sell some common and start buying long dated calls because it would imply BRK is trading at 50-55c on the dollar based on my estimates. Look what Apple's stock did after Jobs' resignation. I bet plenty of people thought it would go down as well and the MOS and general quality of the company is a lot less than Berkshire's at the moment. The longer it takes for Buffett to resign, the smaller the eventual opportunity loss will be in terms of performance as Buffett's extremely rare qualities will have lesser effect each passing year. And if you did a poll on the board some months ago I bet at least 50% would have believed Buffett would never buy back shares.

Lol wait a second. I remember something from this weekend. Stupid coincidence but still... http://www.gurufocus.com/news/146183/berkshire-hathaway-is-now-traded-at-the-lowest-valuation-in-decades#146504 Lol, what are the odds, poor guy. :D (It was 2000 btw and not 1999 but oke.)

Mr Market himself speaks: No fear at all. The problems are mainly in Europe now and yes, things have been hit hard over here. We'll see wether in one year millions of people will have lost there savings, somehow I doubt it.

One thing is certain: Finding $20 billion ideas with the same risk/reward level is very hard if you agree that Berkshire is one of the safest and best businesses in the world currently trading at 60-70c on the dollar. Given the recent deals and stock purchases I believe they see plenty of value in today's market. Share buybacks were just inevitable at some point of undervaluation as Berkshire got bigger just as dividends will ultimately be paid out.

Current price is probably 1,05-1,07x BV so it seems to me that the Market is selling. They won't be able to repurchase 10% of the stock of course unless markets fall substantially from here.

Haha yes! This is great news. Although many thought it wouldn't happen, it sure was one of my catalysts for the stock price. Let's hope they can pick some up for some time to come! The press release is great because they don't give an estimate of IV which will help to keep the stock price in check so that they can actually buy some back. :) Maybe I'll be able soon to switch my 85% position in BRK to some other cheap stuff. 8)

Who's you broker? https://www.binck.com/nl/corporate/ I think they only operate in Europe. Very basic so over time I'll switch to IB or something so I can buy warrants and options as well, not need for it now. The higher transaction costs actually help me being patient by not trading in and out to much. ;D

0.15% / transaction but EUR <> USD only. 1% and more is outrageous. :o

The EURO Stoxx 50 was 7% above the 2009 low today, banks halved in market value and more and the VXO hit 50 in August and is above 40 as we speak. I'd say there is some degree of fear for what is coming and that the market is discounting the coming wave of debt restructuring, lower economic growth, capital rounds for banks,... http://finance.yahoo.com/q?s=^VXO If you click the link (select all) and you put it on the longest timescale you get an idea of what some would call the degree of fear. I have no opinion on where the markets will go from here, I just don't agree with the statement that there isn't any blood in the street. It could very well be that people once again capitulate completely. But it almost feels like we expect others to react this way (some sort of bias) because we just went through the same experience in 08-09. The current fear doesn't seem adequate enough to agressively buy because of our previous trauma. In reality such occasions of capitulation are very rare. It is possible now, but not a 50/50 chance or anything like that imo. Maybe it's because I live between people who lost 25-40% on European stocks? The US "only" had a 15% drop or something like that?

Thanks for pointing out that. I am a Chinese and I am used to getting books for free. I can easily afford books I like, but like most Chinese, I would like to get things for free whenever possible. I do not understand why sharing books would attract wrong kind of people. A guy on this board(thank you!) just give me a website library.nu where a lot of books are available in PDF format. Are you suggesting those who went there are the wrong kind of people? I am not saying what I was asking is right. But your comment is way off the mark, at least for me. English isn't my native language either so my choice of words was probably poor. ;) I didn't want to offend you in any way. I meant something like: If you are going to post illegal content on a forum built on highly talented and dedicated members, you are going to send the wrong signal to newcomers which could ultimately influence the level of posting quality. It's a bit like implementing a reputation system, galeries or other fancy stuff. (Only it is illegal as well. :D) It just doesn't add value and could endanger the overall quality. Imo.

Exactly. Furthermore, over time it would probably attract the wrong kind of people (n/o). If you can't afford them (imo it is almost always a matter of setting priorities) you could always go to the library as someone here suggested. Btw, as we all know most investing books are worth a lot more than their pricetags. Some probably saved me from more than one hairy situation or expensive mistake. I wouldn't complain about prices if you can get your hands on classics for $10-15. But that is just me. :)

I am waiting for that Zerohedge update... Nevermind: http://www.zerohedge.com/news/goldsilver-plunge-fest "Bottom line is, it is a self-fulfilling prophecy at this point and will continue until every last seller is out." The brilliant insight...

http://www.bloomberg.com/apps/quote?ticker=BDIY:IND The baltic dry is skyrocketing since FFH made this investment. :)

Still no interview posted... :( (Yes I am impatient!)

Sorry but I for one wouldn't do that unless it is for rare books like Margin Of Safety. Doesn't Amazon or bookdepository ship to your country? Or let friends mail them to you? :x

Somehow in 2 months a lot of people went from "The economy will survive." to "Apocalypse is near, Europe will implode and it doesn't matter that stocks are cheap because I *know* they will go down further.". These days it isn't hard to spot bipolarity in individuals abandoning all rationality. I have no problem with people being bearish now, but I find it odd if they have extremely less stock exposure now than 3-6 months ago. Most people (not here I think) claiming they will only buy if we drop another 10-20% won't be buying if we get there either. They will just miss the boat and add to their fear dating from 08-09.

Their articles are getting sadder with the day. How frustrated can you be. :o Over time BRK is going to make a killing if markets keep getting lower. No need for underperformance just yet... 1/4th market cap = cash

This is exactly what I argued when Buffett made his investment. Clearly, the equity exposure was integral to the investment. Buffett's betting on the frickin government would step in and save the system if need be - that's what he did back in 2008 and that's what he's doing now. If you go back and look at his Gillette, US Air, Salmon preferreds in the Forbes Buffett interview compilation I posted within the last couple of weeks, he clearly made those investments b/c the actual equity was too risky. Even if the equity is an integral part, by definition, buying something higher up on the capital structure (unless restricted by policy) means an investor deems the lower position is too risky. Orrr... Buffett just realizes he has the negotiation power to get more for his money than others can. This deal is in no way an indication that he finds common stock to expensive or risky. I am in the group that doubts he would ever be willing to bet $5b in pure cash for a lean 6% with a speculative play attached. The glass half full or half empty I guess. Also, claiming Berkowitz is wrong because the price plummeted... That is just stupid. Even if all his bank investments went to zero you still couldn't simply claim it was stupid. There are odds involved that generate very favorable risk/reward scenario's and sometimes they don't turn out to well. It is easy to call something stupid or risky in retrospect without actually having a clue what you are talking about Munger. ;) I guess a lot of value investors are terribly wrong today then...

Look at CLF... Almost -20% in two trading hours, not bad... No idea where this is going to end but I am contemplating switching some of my BRK to cheaper stuff very soon.