val740

Been using CPAP for several years. Be patient. After a while you get so used to it that you don't even think about it. It is worth it for your health. Yes, the better sleep you get, at least after you adjust to it, should make you more productive. Good luck with it. Also, you may have to try several masks before you find one that is comfortable and does not disturb your partner.

Leveraged Buyouts: A Practical Guide to Investment Banking and Private Equity Anyone read this book by Paul Pignataro? It is a book-length case study on the Berkshire Hathaway/3G Capital $28 billion Heinz Co. deal. The book is pricey but looks interesting. http://www.amazon.com/Leveraged-Buyouts-Practical-Investment-Banking-ebook/dp/B00F2JFS5Q/ref=cm_cr_pr_product_top

This discussion is a good example of why long-term investing is difficult. No company - or investor - regardless of its/his past history is without risk. In hindsight, some investments look like they were easy, but sitting tight for years (Munger's sitting on your a*&) requires patience and conviction (it's hard and most do not do it). Conviction is hard to attain and is always haunted by the possibility that something has changed that led to the positive past performance. For the record, I don't think Berkshire/Buffett has been immuned from this. There have always been reasons to second guess, i.e. "too big", "lost his touch", overvalued, "too old", macro concerns, etc. If the standard was not making any mistakes no one would pass muster. Prem has plainly stated that the ride would be lumpy. Little is being said about the positives: the 3:1 ratio of investments to equity, the massive liquidity (fire power) in the portfolio, the cheap (now) insurance against deflation and a market decline, the optionality if these bets come to fruition, the improving combined ratio, the exposure to emerging insurance markets, and the Fairfax investing and managerial talent pool whose compensation is aligned with shareholders.

If you purchase 2% of a company's shares outstanding at fair value there is no change in IV because you paid what the shares were worth. If the shares were repurchased at a 25% discount that would add 1/2% to the total IV [.02 (the # of shares retired) * .25 (the discount to IV) = .005 or 1/2%].

In the Investments section, Buffett shows 22,999,600 shares of DTV. He also states that pension fund holdings are not included. The 13-F shows an additional 11,037,900 shares for a total of 34,037,500 shares. That would be a total of $1.7 billion, or 17% of Weschler's and Comb's combined portfolios. Is the difference because of the difference in pension fund disclosures or something else? Can someone shed light on this? Thanks.

With the deal structure and taking it as a given that 3G has a hurdle far north of the earnings yield that will drop to the equity, it seems that taking it public down the road may be in the cards. Not Buffett's style, but who knows? He did make a point on CNBC to say that the business will not be run by Berkshire but by 3G, perhaps to allow for (and provide cover for) such a future deal. Could be completely off base, but, one thing is for sure: 3G did not do the deal for a 3-4% yield growing at 7%. Also, bear in mind that it is thought that Peltz already squeezed the low hanging fruit out of the cost structure. With the equity levered 3.5:1, the returns look pretty juicy if they can grow at a mid to high single-digit rate, which is not a pipe dream given the company's exposure to emerging markets.

"If past history was all there was to the game, the richest people would be librarians." - Warren Buffett

Top ten holdings = approximately 50% of equities. Gayner buys lots of small tracking positions. If memory serves, Buffett has mentioned buying a 100 shares of stocks to get the annual reports. Not sure if he continues the practice today. Nevertheless, MKL is less concentrated than Berkshire.

Good question Eric. I kind of remember this coming up at the meeting. I somewhat recall a combination of factors: 1. Meaningful portion of capital already allocated to equities. 2. Lack of available dry powder. 3. Preservation of capital. 4. "Thumb sucking." My words, but I think they made this point in their own words. I realize that these factors contain an element of contradiction and overlap. But, as is the case for all of us, intelligent investing cannot be reduced to a cut–and–dried algorithm and Gayner/S. Markel, like all of us, as a result of human frailty, are less than perfect when it comes to execution. I'm confident they would admit as much, which is part of their attraction (they're humble, transparent and honest). Fortunately, as Buffett has pointed out, successful investing does not require perfection. Others may recall the discussion of these issues better than me, and I welcome their corrections and comments. Sorry if I seem like an apologist for MKL. I'm not. Just giving my two cents.

> 9% is a very good result given the economic backdrop and relative to the S&P 500.

i am not sure. If you contact Tom Gayner's assistant, you could ask. I'd bet you could get an invite.

It is held the morning after the Berkshire meeting and includes a very nice breakfast. This year it expanded to the Omaha Hilton across the street from the CenturyLink Center where the Berkshire meeting is held. Tom Gayner and Steve Markel make some opening remarks and then open it up for Q&A. The audience includes a lot of informed investors and large value investors such at Tom Russo, David Winters, Mohnish Pabrai, etc. The discussion is useful and questions are typically informed and intelligent. I have found that attending gives me an opportunity to both follow the investment and take the measure of management, whom I've found to be first class people.

I am interested in MKL and own a meaningful position. You make some valid points. Size is in their favor and they have a long runway. Management is talented, honest and disciplined. They are good investors. Like Buffett, they like high quality businesses with proven earnings and opportunities to reinvest, although they have a more diversified portfolio. They have a track record as good underwriters, and disciplined underwriting is a deep part of their corporate DNA. Markel Ventures is off to a good start. It's still small potatoes but over time it may become a meaningful contributor to earnings. Finally, given its long term track record and strong ROE, it probably deserves to trade at a higher multiple to book (as it has historically). If you're patient, there is a very high chance of getting a good (and maybe very good) result with MKL. Given their cheap leverage and value investing acumen, odds favor beating the S&P. The Markel Omaha meeting the day after the Berkshire meeting is a must stop when making the pilgrimage to Omaha.

In fairness, there is plenty of blame to go around for the financial crisis, including democrats and the private sector. Regarding crony capitalism - which is a huge problem - I wish it was diminished under President Obama. Unfortunately, I think it continues unabated.

Cramer on Feb 9, 2012: "Berkshire Hathaway Is a Screaming Buy" http://www.cnbc.com/id/46334585/Cramer_Berkshire_Hathaway_Is_a_Screaming_Buy