Charlie

Thank you, gfp

gfp, why is Berkshire short Euro? It is probably 90-95% US based, but short Euro? Buffett was very good in the Euro/US Dollar trade, until he said something to the effect that it is outside his circle of competence. Time showed he was right.

What do you think are the Trappings of Wealth? Kids in private education, very big house, luxury holidays, eating out regularly at the best restaurants, always buying the newest expensive car, leaving too much money to your children, buying expensive luxury items, becoming lazy, full bladder effect: That you "piss" your money out or buying a lot of things you don´t need. Don't realizing your deeper reel needs and succumb to superficial needs that are marketed to you. Getting to think that you know everything, Getting too much ego, Envy....?

Earnings and investor conference call are coming tomorrow. So people are buying in the hope of good news.

In Germany they call it shortage of skilled workers. It is everywhere. Polish immigrants are helping a lot in this shortage of labor with home renovations and they are very good. If you are a skilled worker you can be very choicy. God bless skilled workers.

I bought some Berkshire b shares. The statistical weak months September and October are over. The election is coming to the end and there could be a rally, because of ending of uncertainty. Results are coming at Saturday and I am betting on that the gift will still keep giving.

Jim Grant says ‘the greatest equity investor’ — Warren Buffett — is trying to warn you about US stocks and is supposedly choosing this 1 asset class over equities. Should you follow suit? https://www.msn.com/en-us/money/savingandinvesting/jim-grant-says-the-greatest-equity-investor-warren-buffett-is-trying-to-warn-you-about-us-stocks-and-is-supposedly-choosing-this-1-asset-class-over-equities-should-you-follow-suit/ar-AA1t7Sx8?ocid=msedgntp&pc=LCTS&cvid=f28e9d8bad8040e39d30bb19615f5ab1&ei=12 Cheers!

Don´t cut the flowers, to water the weed. I got rich through Berkshire, so why should I sell? That doesn´t make sense. Berkshire has a lot of structural advantages and is very good at capital allocation and very rational and Munger and Buffett advise their children not to sell. It´s a No-Brainer not to sell (of course also because of taxes). Don´t kill your golden goose. The money managers always want that people sell their Berkshire, probably for their self-interest. I have heard a 100 times that this and this stock is smaller, so it has to outperform Berkshire. Most of the times it doesn´t work out and it ends badly.

In the second quarter the biggest purchase of Fairfax was a SP 500 Vanguard ETF: https://www.dataroma.com/m/holdings.php?m=FFH Anyone know the reasoning of this purchase? Diversify from deep value style? Exposure to unpredictable tech sector? Stability? Betting on Trump that he wins the election? Scarcity of other good investments? I remember a quote of Buffett, that it is probably a mistake for very good investors to index, so just wondering.

+1 I would do the 20 punch card model from Buffett and in the other time you do what you enjoy most in life. Live life to the fullest.

Yeah, it was wishful thinking, but it was a lot of fun.

https://archive.ph/WboyO The author thinks we could be acquiring Chubb and is quoting the Thomas Gayner (Markel) sentence.

This is probably true.

The Thomas Gayner comment is pretty interesting and smells like a possible acquisition or it´s wishful thinking from me. That´s probably true.

We will travel to South Africa in October. East London, Jeffrey´s Bay, Addo Elephant Parc, Tsitsikama National Park etc. My wife and our 6-year old sons. Pretty enthusiastic about it.

Yeah, we should be so lucky!!! Not complaining all the time. I thought about some theories last night. Some pretty idiotic, but you have to be creative: 1. Tech people/AI people (e. g. Apple) are finally discovering that tech could be overpriced and shifting to safe heaven (Berkshire). 2. Cryptocurrency people finally acknowledge that Munger was right (... is worthless) and shifting to safe heaven (Berkshire). 3. The selling pressure of the Bill and Melinda Gates Foundation has stopped, because they are getting no Berkshire stocks anymore. 4. Buffett wants to do something big and it is easier to do something big in an overpriced world with an overpriced Berkshire stock (like General Re in 1998). 5. There is a big acquisition going on. If there is a big acquisition, Buffett could be repurchasing shares. That could be the reason why he stopped buying Occidental shares at lower prices. Thomas Gayner (Markel) in a recent interview: "About Berkshire’s eventual sale of the 3.5% position in his company, Gayner added cryptically, “There are other things going on that I’m not at liberty to talk about.” Your guess is as good as mine on that one. https://www.kingswell.io/p/markel-ceo-tom-gayner-talks-berkshire 6. The P/B valuation method gets less and less relevant. 7. Buffett wants highest flexibility for him and his successor. He doesn´t want Greg to do all the hard capital allocation decisions (+ tax reasons). Cash has the highest flexibility and has a good risk-free yield. 8. Statistically we are closer to the next recession and in a recession Cash is king. Any comments?

He is searching the world on a basis of opportunity cost. It is not market timing. It is about getting the best risk-adjusted return.

Statistically probably every 5-10 years there is a correction in the stock market. We are in year 4 since the last correction. So opportunities are coming and things don´t grow to the sky. The elephant gun is loaded for this and Berkshire is very good in investing when everything goes to hell. It is a flaw in human nature to think that the future will look like the recent past. It is still the boom and bust cycle and things can change very fast.

I sold Bank of America shares of my mother. When Buffett is fearful, when others are greedy it is better to listen.

+ 1 For me, the top 3 are: 1. Buffett´s shareholder letters 2. Anything Buffett or Munger wrote or said. 3. This: https://buffett.cnbc.com/annual-meetings/

Great book! If you really want it safe, stay at home. You know your home. There are no enemies (sometimes your wife) and no other catastrophes. https://www.barrons.com/articles/yacht-bayesian-mike-lynch-sinking-causes-89781e2a?mod=past_editions

It correlates with the historical weak stock market months September (or late August) to October. I think the weakest month is September and than comes the big crash month October. Probably it has to do with the emotions of people. Summer is ending and the depressing autumn is beginning. I hope the weak stock market months are living up to their name and all Berkshire shareholders should hope for it, too.

+1 Followed Buffett, Watsa and Li Lu in Occidental. It looks pretty cheap.

Sold the Apple shares of my mother. With Buffett´s selling at probably much lower prices, likely continuing selling of Buffett, a high valuation (PE of 32), China risk and the natural lack of certainty with tech it didn´t make much sense to hold. Valuations matter.

I saw this, too and was tempted to buy, but unfortunately did not.