Charlie

The beauty is that Berkshire is not expensive: At a P/B of now 1,36 and tomorrow with earnings out perhaps P/B of 1,3 it´s still only 10% over buyback level, so with businesses booming and the P/B quite low, the stock has some way to go... :)

I think most of Berkshire´s businesses are booming as optimistic as Buffett is in some interviews. :) Here you can Buffett ask questions (3 hours with Becky this coming Monday): http://www.cnbc.com/id/100502034?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

Swiss Re with good results. http://www.bloomberg.com/news/2013-02-21/swiss-re-plans-2-8-billion-payout-on-lower-disaster-loss.html?cmpid=yhoo Cheers!

"BRK was selling for a deal of our lifetimes over the past few years. I have never seen Buffett nudging his shareholders to buy more than he has over the past 2-3 years. I re-read the AR again and his comments at the recent buyback." +1

Happy Anniversary and many thanks to Parsad for this wonderful board!!! :)

Palantir, it seems so that Munger didn´t talk about your questions. The portfolio will probably not change much.

Some other good notes from RoughlyRight. My favourite: "Not surprised that stocks are going up with interest rates low. That’s why we own stocks." Enjoy :) Author: RoughlyRight Subject: DJCO 2013 Meeting Revisited I just typed up my notes from the meeting. I like to just jot down things. Daily Journal Meeting, February 6, 2013 In WWII, one member of Congress voted against going to war with Japan—shows how difficult unanimity is. Foreclosure boom. Boom for us (DJCO). Biggest in the history of the world. Made an unholy amount of money. Something about being reminded of the sword of Damocles hanging over one’s head. The 50-year future of newspapers is not good. Local newspaper used to be the 4th estate. The 4th part of government. Civic minded. Honest. We’re losing something. DJCO didn’t take a position ever on politics. Half the readers would agree; half would not. Several monopoly newspapers borrowed money, bought others, went bankrupt. DJCO bought up small papers. The paper came with a free option related to the public notice business. Made 1000’s of percent in foreclosure boom. Like a funeral parlor owner in a plague. Best to live by reacting right to what comes; difficulties, etc. Not by seeing well in the distance. No master plan. React to opportunities and hazards. Enlightened opportunism. Fix problems as quick as you can when they come up. Want DJCO shareholders to do well. Owner operation. Would feel terrible if we had done what GM did to its shareholders. DJCO’s doubling down on software. Like the people. Could be a bonanza. In a lawsuit that DJCO lost. We lost unfairly, but that happens. Ratings agencies. Admitted to serious mistakes in judgment. Charlie doesn’t think they were consciously lying. They were stupid. Sure there may be some embarrassing emails. Sol Price. Success in business came from what he would be better off without. Leave money that is tainted. Do without that. Warren at Solomon. Wanted a list of things that were turned down that were just legal. Don’t think he ever got that. Criminal law should not be the standard. Don’t behave in relationships that way. The miscreants have no shame. Soft white hands. Doing well at poker or in the securities markets. 2008. Circumstances different. Something changes. Act differently. Behave sensibly; reacted to opportunities. GM’s point of view: someone else’s fault. Their prosperity made them weak. Why do BRK acquisitions work? Buy in many fields, not one. Don’t pour endless treasure into losing hands. With World Book, just got out of the business. Some business owners will only sell to BRK. Charlie about attendees at the meeting. We’re addicts. Meeting was being held in the original part of L.A. BRK has two reasonable options at all times: buy companies; buy stocks. CEO for 5 years. Can’t change a company in 5 years. Thinks CEOs should have a long run. Government. There have been crazy kings. Ben Franklin: When you can vote yourself money instead of working, … Consultants (pension funds). Monthly returns. Hard to change. People profiting from it, like it. Worse than problems in government. Way too short term. Do we want everything taken over by Carl Icahn? Would that be good for the country? I think don’t think so. Not surprised that stocks are going up with interest rates low. That’s why we own stocks. Money management. Hire smart guys, study industries, etc. Problem is that it doesn’t work. Munger approach is to just find a few great ideas. Munger had zero transactions in his accounts last year. Owns BRK, COST, and Asian securities through “a guy like him, but much younger” (Li Lu). Charlie’s way is right; others are wrong. Only a few decent ideas. Keep your head down when all others are losing theirs. They teach diversification, rotation. Blow up whole profession. When Charlie had a good idea, he went in heavily Diversified Retailing. Big mistake, got out. Took the $6 million and bought stocks that were cheap. Rub your nose in failure. Not going to get many really good investment ideas. Don’t blow it. Go with courage. Borrow. Intelligence and gumption. Charlie likes the word gumption. BYD. Unusually talented group of people. For 15 years, grew 75% per year. Started with little capital. Have had problems over the last three years. Li Lu thinks they have been solved. CEO Wang Chuanfu is a very talented human being. Kipling: Treat those two imposters the same: success and failure. Tragedy in life is if you don’t play so hard that you don’t have some reverses. Newspapers: Decent investments, but not going to make tons of money (I think he was referring to newspapers recently bought by BRK) DJCO investments: probably WFC and BYD CA politics. Driving out elderly rich is bad policy. They aren’t going to schools. Their healthcare is paid for. Many are self-centered. They take actions like moving to another state. Charlie: I’m not going anywhere; won’t move across the street to save his kids $50 million. He said for most in the room today, the biggest problem with their children will be making their lives too easy, not too hard. Book recommendations. Charlie is reading an astrophysics book, “A Universe from Nothing: Why There Is Something Rather than Nothing.” Author: Lawrence Krauss Printing money instead of taxing. Will be a big backlash. Just don’t know when. Retailing. Tougher and tougher. COST a winner. Peter Kaufman book suggestion of Buffett’s: The Outsiders. Author : William Thorndike. Charlie. It took some gumption to buy See’s Candies. Got free pricing power as an option. This is a model that Charlie was into today. Something might be fine at present, but there also may be a free option buried into the investment. Because of See’s, got into Coca-Cola earlier as a result. Reminded us attendees again that we were groupies. The meeting lasted for slightly over 2 hours. Charlie recognizes that some have come a long way for the meeting. Charlie is 89 now, but seemed similar to how I remember him when I first started going to BRK and Wesco meetings when he was about 72. Charlie seemed to enjoy the meeting and we all look forward to more such meetings. One attendee stated that there is a difference between knowledge and wisdom, and we come to such meetings for wisdom. The person went on to say that it was like recognizing that a tomato is a fruit, but you know to not put tomatoes into a fruit salad. Frankly, I think Charlie laughed harder at this joke than anything I’ve seen him laugh at before. RoughlyRight

Since value investors tend to buy to early and sell to early here is my advice: Don´t sell to early. :)

Good results from Munich Re: http://www.bloomberg.com/news/2013-02-05/munich-re-raises-dividend-as-profit-exceeds-expectations.html?cmpid=yhoo Cheers!

"Ha, I always thought Trader Joes would also be a great fit. I would love to own that store." It´s owned by Aldi. The most successful company in Germany. ;)

Here Buffett said he would love to own In & Out Burger. :) http://www.rbcpa.com/companies/brk_notes.html

Thanky ERICOPOLY for the Soros interview. Always a good read. :) I am 0% cash, 100% Berkshire. I agree with Mohnish Pabrai: Do you feel better about 2013 than you did 2012? His basic answer was yes. "People will be surprised at how robustly the U.S. economy comes back," he said. :)

"Interestingly, a large part of the "small cap effect" is actually some of these larger companies rebounding after they have been beaten down. :)" Do you have any concret evidence about this? :) One evidence is perhaps the O´Higgins strategy: You take the 5 stocks of the "Dogs of the Dow" with the lowest share price and rebalance yearly. I think the annual outperformance to the Dow Jones/DAX is around 5%. This strategy worked for a very long time in the Dow Jones and DAX index.

http://www.fool.com/investing/general/2013/01/10/mohnish-pabrai-what-ive-learned-from-warren-and-ch.aspx Cheers! :)

Buy when the Dollar is low/Euro is high and sell when the Dollar is high/Euro is low. As George Soros said it´s an ugly contest of ugly currencies. ;)

100% of my money in Berkshire ;) My returns should be larger than 16,82%, because I was investing half of my money in Berkshire, before Buffett made the repurchase announcement. Today was a good day :)

Happy new year to everyone. :) I wish everyone a healthy, happy and prosperous 2013!!! Thanks to Parsad for this great message board.

Thanks for your always great answers :)

""This follow the leader strategy has worked much better following Warren than following other value investors because of the extreme standards Warren has used especially in recent years when making a major purchase. The depth of Warren's reasoning is not always obvious. For example, I did not fully understand his key insight into USG until I had spent many long hours studying it. :)" twacowfca, we follow the same strategy :) In terms of opportunity costs I have some regrets in 2012. The biggest opportunity cost was probably not buying USG, after Buffett said the housing market would soon recover and USG was still very cheap. You know probably much more about USG than I do, so did you buy USG and if not, why not? ;)" Since to ask the question is answering the question I will answer my own thumb sucking ;) - rear-view mirror - not looking at the housing numbers and thinking and reading of other unrealistic doomsday scenarios - Management made some mistakes and there´s seldom one cockroach in the kitchen - afraid of cyclical stock - not knowing enough about USG - Buffett stopped supporting USG, after one mistake.

"TWACOWFCA. Caps because your answers are always great! Thanks!!!" +2

"This follow the leader strategy has worked much better following Warren than following other value investors because of the extreme standards Warren has used especially in recent years when making a major purchase. The depth of Warren's reasoning is not always obvious. For example, I did not fully understand his key insight into USG until I had spent many long hours studying it. :)" twacowfca, we follow the same strategy :) In terms of opportunity costs I have some regrets in 2012. The biggest opportunity cost was probably not buying USG, after Buffett said the housing market would soon recover and USG was still very cheap. You know probably much more about USG than I do, so did you buy USG and if not, why not? ;)

I like the part where they say that Warren Buffett is not being underestimated, but Berkshire Hathaway is being underestimated ;)

Here is a good quote from the annual meeting of Berkshire Hathaway with regards to growth: "Charlie added that the first $200 billion (in market capitalization) was hard for Berkshire to create, but the second $200 billion with the momentum Berkshire has will be pretty easy given Berkshire’s culture." :)

Thank you for posting. Great read! :)

http://www.marketwatch.com/story/djia-considering-structural-changes-report-2012-09-22?link=MW_home_latest_news SAN FRANCISCO (MarketWatch) -- The owner of the Dow Jones Industrial Average is considering changes to make it more relevant and will discuss possibilities at its next meeting with major index users, according to a media report Saturday. The changes are being considered by Dow owner Stndard & Poor's because the index is supposed to be a measure of U.S. industrial titans but doesn't include Apple Inc [s:aapl], Google Inc. [s:goog] or Berkshire Hathaway Inc. [s:brk.a], the Financial Times reported, noting they are three of the largest U.S. companies. There would be problems adding them to the Dow bedause they would dominate the 30-stock index that's weighted by price, the FT said. David Blitzer, chairman of the index committee for S&P DJ Indices, said the issue is being discussed, the FT reported. Cheers! :)