Valuebo

Well, If Buffett bought the common he wouldn't have the 6% and the 5% break up premium on his cash? Am I missing something? ??? And tiny? Please... $5b is almost 3% of BRK's market cap. Considering how diversified BRK is I would say that is a decent bet. Imagine what his return could be. Doubt you would call it tiny if things turn out well... In a bull scenario the 6% from the preferred will be peanuts in comparison with his return on the warrants. 10 year is a long time.

He basically pays a very little premium against what the BAC-WTA warrants went for in public, has a 10-year period instead of an 7,5 year period AND got preferred stock? Am I correct? Insane deal if you ask me. What are others thinking? Gratz to ERIC and others by the way! I am confident this will work out just fine. :)

Nice! ;D I am to late to the party. :( Ah well, got 90% of my money in BRK, I'll be fine.

Interesting post VAL. But Dell seems to see it totally different : I can relate with both views but my expertise is to limited to pick a side here. I can believe this could be the right move for HPQ but on the other hand it could be very advantageous for DELL as well. Time will tell!

I'm sorry moore, my french is a bit rusty. I reread it at it turns out that it is a 3% tax on income from work/capital gains, not total assets! ::) My mistake!

http://www.lemonde.fr/politique/article/2011/08/24/francois-fillon-devoile-son-plan-de-11-milliards-d-euros-de-reduction-des-deficits_1563069_823448.html#ens_id=1550914 They just announced a 3% tax for everyone with $500,000+. :o

Thanks Uccmal, I'll look for that prospectus and try to find the answer there. :) The BAC-WTA at $2,97 with a strike price of $13,30 in 2019 really makes we want to have a closer look at BAC. Such plays will always be a bet in some way as there is no way that you can calculate IV accurately. However, when you buy the warrants your downside is limited just as much as with common stock (=zero). The only difference is that with common stock you will have lost a lot more capital in case that happens (highly unlikely but oke). Above a certain price the warrants will turn out to be extremely lucrative when bought at current prices.

I would like to thank everyone for this great topic, very educative. Could anyone explain what would happen to the BAC warrants if (hypothetically) BAC was acquired by another bank?

http://www.bloomberg.com/video/74310536/ ;D

Post of the year.

For most things (like career success, money, a 10-bagger in investing, ...), your chances for so-called luck increase exponentially with the amount of effort you put into it. Most of the time, what people call luck really just is the result of hard work and dedication. The world isn't as random as many would like to believe, at least not when we look at how success is achieved. I also believe the above is only true when comparing people with the same kind of possibilities and background. Your starting point (IQ, EQ, basic health, social environnement as a kid, ..) truly is pure luck. I believe that 99% of the time, the other kind of luck is bullshit that underachievers make up to feel better about themselves.

http://www.amazon.co.uk/gp/product/B0054689MQ/ref=s9_pop_gw_g147_ir02/278-8683330-8877113?pf_rd_m=A3P5ROKL5A1OLE&pf_rd_s=center-2&pf_rd_r=0SA55AC1B42EET44DGQ2&pf_rd_t=101&pf_rd_p=246857807&pf_rd_i=468294 From £400 to £275. "Only" $452!!! :(

Nowhere to order for Europeans. :'(

I expected more from the members on this board. I am definitely not a gold bug, but I do know that chart is very misleading. Adjusted for inflation and the depreciation of the USD, gold is still nowhere near the 1980 highs. Not only is the chart misleading, it's a non-sequitur. Just because gold prices went nowhere for 20 years doesn't mean the current run in prices means it's in a bubble. Gold was priced MUCH lower 100 years ago as was equities and other commodities. The USD was much higher back then too. This just reminds me of when someone else on here claimed that Japanese stocks jumped after their S&P index. It's selective bias, and it was clearly wrong. I hate cherry picking data to fit one's hypothesis. It's not scientific and leads to terrible thinking. I believe I said it was posted "just for fun", as it relates to the topic title. Nowhere I claimed the chart was adjusted for inflation and depreciation of the USD, nor did I claim gold is a bubble. The only thing I wanted to show is price evolution of gold over the years and the increasing rate at which it appreciates lately. Also, it is dangerous to view separate members and their posts/ideas as the "average level" of this board. Sadly, I am far less experienced and talented than most here, not to mention my limited intelligence compared to some. ;)

They would lose some BV and you would get another possibilty to add to your position? ;D -4,5% today after all the good news lately. Won't be long before I pick up some more if this continues. I have new cash coming in and FFH seems far better than holding cash waiting for prices that "could" get cheaper. I bet they are making tons of money. That didn't take long... ::)

+1 Liberty. Not like he just bought the currency... I wonder what that gold would be worth if paper currencies truly dissappeared because we have an economic reset. How much gold would you need to buy yourself something that actually can produce something of value? The worth of gold would be the least of my worries. If you can't be optimistic and assume that in the end things will turn out ok, there really is no point in investing. Just for fun, says it all : http://goldprice.org/charts/history/gold_all_data_o_usd.png This is rational. Really!

They would lose some BV and you would get another possibilty to add to your position? ;D -4,5% today after all the good news lately. Won't be long before I pick up some more if this continues. I have new cash coming in and FFH seems far better than holding cash waiting for prices that "could" get cheaper. I bet they are making tons of money.

Wow. Great post indeed! I don't feel worried at all either. If we drop 30% that will just mean I'll have to wait a bit longer for intrinsic value to be reached. Actually I was worried I would be scared when markets dropped and I had little/no cash left. Turns out I am just sad I don't have any more to spend. Some things go up, some go down even more. If something really was a bargain last week, why wouldn't it be a bargain anymore today because it went up 5%?

sub 2%. :D

3 stocks FFH owns. Care to elaborate?

Value traps lose both stock value AND intrinsic value. Not sure what the author is referring too.. And if you have to wait for Mr market to recognize iv, just sit on your hands and let iv compound over the years? ??? Not sure how his "reversion to the mean of profit margins" is an argument against value traps as all companies would face the same faith. Funny enough, banks, insurance companies and a lot of companies with competitive advantages will probably suffer a lot less from this "reversion to the mean of profit margins". A real pundit indeed! ::)

DELL -10% after reporting its Q2 results that were released yesterday. http://www.engadget.com/2011/08/16/dells-q2-earnings-fall-short-of-estimates-890-million-net-inc/ They expect revenue growth to stall but EPS target was raised. Guess this is what happens if you bid up the price on expectations of an earnings beat and buy based on CSCO's quarterly report.

Looks to me that he just says he doesn't expect a recession but that there is always a possibility that it does happen because external factors can influence things greatly. That said, Buffett probably feels he has a responsability towards society not to feed fear and to keep optimism alive. Aside from that, you just really have to be optimistic and have faith if you run a $200b company with more than 250,000 employees. Self fulfilling prophecy leads nowhere.

Nice! Just like you predicted Sanjeev. ;) Prem is on fire. First non-insurance business acquired, substantial investments in BoI, shipping and India. Keep it coming!

Does it make a difference if they increase volatility? For all I care they let stalwards move 20% up or down each day, if you hold for the long term it won't matter and short term it creates opportunity. Probably very shortsighted of me. Please nuke my idiotic remark. :)