goldfinger

I do not think that index funds did their buying ahead of schedule: too much risk involved with the uncertainty (even if there was almost none) of the acquisition. They do their buying after the fact, that's their function. Tomorrow might be interesting.

I happen to have worked 15 years ago in France with people Taleb associates himself with. Jean-Philippe Bouchaud and Didier Sornette (who he describes in his book "Black Swan") are scientists educated in the most elitist "Ecole Normale Superieure" rue d'Ulm. They have been exposed to most advanced fields in mathematics and physics and gone through some of the most selective competitive exams and education systems. While brilliant in their fields, they are scientists who happen to be driven by theory first in the most traditional french thinking process. Their aim is to find fundamental laws to explain most phenomena. They specialized in earthquake modeling and prediction or the analysis of certain states of matter for a living and were trying to extend their models to the rest of the world, in this precise case: finance. Taleb introduces very interesting questions and remarks: he attacks preconceived ideas that certain well known intellectual processes bring complete explanations of the evolution of real life systems as many system changing phenomena escape or have escaped our perception or knowledge. Chaos, non-linear systems, evolutionist theories for example will definitely connect with his ideas on many points. However, he stays at a very general/theoretical/philosophical level: he is in search of rules that explain or disprove it all. He is an intellectual speculator also. Buffett and Munger proceed in a much more practical way. They stay within the boundaries of problems they can solve in a context that makes sense with reasonable accuracy. If an asteroid crashes on earth, Buffett system will fail but who cares then ? If capitalism disappears, Buffett system will fail but who cares then ? Etc... Whithin these boundaries, analyzing competitive advantages, the effects of human psychology or the persistence of certain models makes total sense and that is something that totally escapes Taleb's perception. I would not want Taleb to be CEO of the company I work for, or general of the armee I fight with because he would not find the competitive advantages and tactics that would make us successful as he would always doubt they could really work in all situations he would consider.

The concept of buying a dollar for 50 cents seems too hard to grasp for a statistician.

Moreover, mergers introduce costs and inefficiencies too (at least in the short run). I have been involved in a few at a much smaller level and teams - processes - technologies could not be merged that easily. Ackman brings up the positive points but I believe he is slightly too optimistic on the results of the merger, at least in the next 2 years. My personal valuation would be closer the the low 40's.

Is he missing something that Buffett isn't ? ???

Errors of omission: not buying ACF close to 4$ when Berkowitz was backing it and the book was obviously very well managed: 5 bagger missed. Errors of commission: buying some LUK too early (in the high 20's). Buying SNS a bit too late (high 9's - low 10's). Not committing enough capital to certain ideas (not enough in WFC at 10 or AXP at 12). Things went well and I feel good with my current portfolio, but I made some mistakes along the way...

Thank you very much. I truly enjoyed reading it. I sent an email to Chanticleer to get some of their letters for a prospective investment but never got any answer.

Oldye, That was my first reaction a while ago, but then if you take into consideration the amount of capital he has under management, his approach may make more sense. He is rather talented at what he does...

why ?

She should have kept her mouth shut! Now we know that she is not that smart and she removed any doubt on her true competencies.

Isn't it the role of the markets to anticipate?

Sorry the attachement didn't work: Here is the text: What do you think? We want to know! Are you more likely to buy shares of Berkshire Hathaway now that the stock is more accessibly priced? Yes, until now it was too expensive for me. No, it doesn't change a thing. Vote to see results Are you more likely to buy shares of Berkshire Hathaway now that the stock is more accessibly priced? * 490 responses Yes, until now it was too expensive for me. 71% No, it doesn't change a thing. 29% Not a Scientific Survey. Results may not total 100% due to rounding.

From a CNBC article: http://C

Since BRK is undervalued you are not taking a lot of risks as long as you are prepared to hold it if things don't go your way. My personal speculation is that: - operating earnings are improving and book value will be at 90K or more soon per A share. - global recovery is higher than previously expected. - B shares splitting + BNI acquisition will be complete soon. - people are now looking more at large caps as they are undervalued relatively speaking. Those may be short term catalysts for a BRK run up closer to IV soon. We will see...

That's exactly right. Most small "investors" I talk to you think that way. I have been asked so many times: "What is the price of a berkshire share" and when I respond they say "It is expensive!", then I explain "It all depends on what you get for that price, right?" then they look at me like there is something I don't understand. Then they talk about some stocks that are cheap because they are below 10 bucks a piece. Yeah, that's what is really happening out there!

I have problems understanding his 20 stocks diversification rule but I may be crazy...

Thanks a lot Wabuffo, I'll take a look. You are a very talented investor by the way.

Wabuffo, Can you tell us more about your current pick CASH? I would be interested in your analysis about this bank.

When Warren allocates capital or takes operational decisions these days, he does it with a very long term perspective in mind. He can't do otherwise because: - he is getting very old. - he has enormous amounts of capital to invest. He can do it better than anyone else because: - he knows more than anyone else about business and investing (in his huge circle of competence). - he has access to information no one else has (thanks to his operational businesses in part). - he is wiser than almost anyone I can think of (he has Charlie to help him here). So when I try to appreciate IV, I think about that and look at the business without Warren... It is definitely undervalued by at least 30%. I think people will be surprised (even among value investors) by Berkshire free cash flow generation abilities when the economy recovers. We are deep in Carnegie territory with BRK's operational side.

And it was a very useful call for anyone willing to listen. Thanks Warren and Charlie!

Same to you Sanjeev and many many thanks for having created the best stock board on earth !

Thanks Sanjeev. You are a terrific guy, really!

Hopefully not as it was the result of major mistakes that we all hope they have learned from by now...

Ericopoly said it well indirectly: we may not have the same perspective as individual investors as fund managers do. There are a bunch of fees I don't have to make up for and besides I am not as good as Sanjeev: it is his job and I am not as smart. Finding exceptionally talented investors to take care of my money at no fees at a decently discounted price to current value is a big feat for me (with no tax for a while). I was in Wells Fargo sub 10$, or AXP sub 12.5$, I sold close to the 30$ each and redeployed into FFH, SSN or BRK at close to book for assets worth much more under the right management. I am OK with that, especially long term. I did some of the "freaky" stuff he said we were not doing recently, but during more "normal" times I do not have the ability to do that much better. If I had a fund, I would probably think differently as I would have to think about my partners and volatility, fees and comparative performance, and I would spend all of my time in it...

enoch01 gave a good overview of the true book value. I'd say fairly valued at best. Now they were bidding for some insurance assets along with BRK recently if my memory is correct. I sold my position in the 25ish recently and started redeploying into SNS as I see better upside in the future.