CanadianMunger
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Posts posted by CanadianMunger
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21 hours ago, coffeecaninvestor said:
If you said Johnny blue I’d have been right with you.
Come on man this is a value investors forum, way better options available for about a third of the price haha
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I love Warren but the size of this cash pile is...Indefensible
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A true original. Thanks for sharing your wisdom all these years Charlie. Rest in peace.
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3 hours ago, gfp said:
You can wait around for a company this high quality and strong to trade at 12x their real, actual cash earnings (vs. the accounting earnings at most other firms), but you might be waiting for a really long time. Then when it happens, few will actually buy the shares because of whatever the reason is that it got so cheap in the first place. This isn't some microcap shitco, it shouldn't trade at 12x clean cash earnings unless something horrible is going on.
As usual, the best take around.
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gfp - Your explanation looks spot on, great post. I can't recall Berkshire initiating a management change of an acquisition this quickly before(?) so yeah it looks like they weren't happy being gamed.
edit: imo, gfp your commentary on Berkshire has the most signal to noise ratio and that includes the greats such as mungo and rationalwalk among others. I always look forward to reading your posts - thanks sir!
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Royal Bank of Canada injects cash into US subsiduary:
https://finance.yahoo.com/news/2-rbc-pumps-capital-californian-154026168.html
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53 minutes ago, competitive-advantage said:
What a fantastic story. It brought back a couple of memories.
Once, I was on a ski trip with a man who had rigged a television bingo game here in Denmark. The channel allowed viewers to print out bingo tickets from their website, and this man had somehow deciphered the system, enabling him to win as quickly as possible. He won an array of prizes, including an old fire truck, until they eventually discovered his scheme.
@John Hjorth Was that you?!?
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2 hours ago, MCR said:
Hi, All. I was the one who submitted the question that Becky Quick asked about OXY, CVX and the Permian. While it was great to sit in the arena on Saturday and hear my question asked, honestly I don't feel like I got a direct answer. The WSJ reported in March that Permian production may have reached its peak. So, as a shareholder it would be helpful to hear the reasoning behind the position. IMO, Buffett and Munger's response to the question didn't entirely line up with this reporting -- either challenging or affirming it. I didn't gain a clearer understanding of what they see or know that others may not see or understand.
I'm pretty sure Buffett wants to keep on buying Oxy, so it's no surprise he didn't give a straight answer on it.
Also, I'm pretty sure he intentionally telegraphed that Berkshire will not be purchasing Oxy outright to front run the arb's that would come in as the stake goes up.
We'll see what happens.
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I have a feeling the letter is getting shorter due to:
1) Nothing new to say as mentioned above by someone
2) Decreasing the expectations for Greg to write a long letter after Buffett leaves the scene
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7 hours ago, gfp said:
Q3 results are out. Another quarter with only $1B in repurchases will disappoint some.
$1B was definitely disappointing, considering the increase to the cash pile. Munger has commented before that the buybacks have been too restrained, and I agree!
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Second anniversary of this post. November 1, 2020 to November 1, 2022:
Berkshire: $202.33 --> $294.13 45%
Brookfield: $39.59CAD --> $54.55CAD 38%
Fairfax: $350.24CAD --> $670CAD 91%
The BAM and FFH numbers don't include dividends and not sure if BAM had any spinoffs during this time. Would be lovely if someone can post a total return graph including S&P500, or direct me to a site where I can obtain and post. Thanks.
Fairfax clearly in the lead two years into the hypothetical ten year holding period. Will be interesting to see how this plays out in the coming years.
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Check out the two interviews Tim Ferriss did with Edward Thorp this year. Thorp is 90, yet looks 60 and has reinvented himself multiple times. Lots of topics are covered, including aging, investing and as an added bonus a few Buffett anecdotes.
I prefer transcripts, so here are the links:
https://tim.blog/2022/05/28/ed-thorp-transcript/
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It's odd because Warren seemed sharp in the Charlie Rose interview. Perhaps it was edited and condensed?
Took a quick reminisce tour through the CNBC annual meeting archive starting in 1994, and skipped every 5 years. Warren still seemed pretty sharp even last year.
TBH it gives me pause as BRK is my largest holding. He has noted that the board will know when to take the keys away - but lets be honest - these people have adored and loved him for decades.
They say an experience is not only valued on the whole but particularly based on how it ends. I hope my last impressions of the GREATEST OF ALL TIME are not what we saw today.
I thought I would never say this, but perhaps it is time Warren retired.
-CM
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18 hours ago, bizaro86 said:
I'd love it if when opening a new thread it went to the first unread post.
Clicking the blue dot located to the left of a topic should take you to the first unread post.
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Berkshire, Constellation Software & Alphabet
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Buybacks are better than partial spinoffs especially when company holds excess cash.
Lot of listed companies languish in performance so hardly an argument for motivation.
Humans do respond to information (market quote) as evident from rising media coverage and price of GME, Bitcoin...Do human generate returns (alpha) from this information?
Disagree with all of this. Nothing further to add.
-CM
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“The plan to create a publicly listed operating group made up of Topicus and TSS was a key part of our discussions with the Topicus founders. They didn’t want their legacy disappearing into the craw of an omnivorous conglomerate. While they knew that Topicus would have autonomy within Constellation, they also wanted identity. The public listing is expected to afford our Netherlands-based businesses a platform from which to celebrate their culture and achievements.”
Why shouldn't Berkshire follow Constellation Software's lead by partially spinning off stakes in their major businesses?
I re-read the 2019 annual this week (nearly all of it) in preparation for the release this weekend of the 2020 report. Nearly all of their non-insurance businesses with the exception of BHE have been pretty stagnant for a long time. What is their motivation to improve? A pat on the back from Buffett and Abel? What happens post WEB?
At least when you have a public quotation their is some real feedback on how you are performing (or perceived to be performing), rather than being buried in some huge conglomerate. Look at PCC, their last major acquisition - it was a poor performer pre-covid and looks to be a train wreck. If it was publicly quoted, there would be some real time feedback on how they are performing. Conversely if a portion of GEICO was public over the past few decades it would have reinforced how well they have done. Humans respond to information (market quotes).
Berkshire could still own a majority stake and of course consolidate results.
I'm surprised that with all their expertise on incentives and psychology that WEB & CM have not tried this. I suppose on one level it would be an admission that the conglomerate structure is not always optimal. Mark Leonard has spoken on identity being lost the more an organization grows.
"I'm an old dog, but I'm certain that they have new tricks to teach me" - Mark Leonard
Will Berkshire eventually learn some new tricks?
-CM
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Baskin wealth had some intelligent thoughts on the subject:
https://baskinwealth.com/blog/fun-with-numbers-should-you-realize-capital-gains-and-pay-taxes-early/
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Looks like the washed up old dog still has a few tricks up his sleeve ;)
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BRK will likely deliver 1 or 2% under the S&P 500 over the next decade. Solid.
The following is from Buffett's 2015 special letter "Berkshire - Past, Present & Future":
"Purchases of Berkshire that investors make at a price modestly above the level at which the company
would repurchase its shares, however, should produce gains within a reasonable period of time. Berkshire’s
directors will only authorize repurchases at a price they believe to be well below intrinsic value. (In our
view, that is an essential criterion for repurchases that is often ignored by other managements.)
For those investors who plan to sell within a year or two after their purchase, I can offer no assurances,
whatever the entry price. Movements of the general stock market during such abbreviated periods will
likely be far more important in determining your results than the concomitant change in the intrinsic value
of your Berkshire shares. As Ben Graham said many decades ago: “In the short-term the market is a voting
machine; in the long-run it acts as a weighing machine.” Occasionally, the voting decisions of investors –
amateurs and professionals alike – border on lunacy."
Given Buffett's modesty, are we to infer that purchases made around these levels (~1.2 book) will outperform the S&P?
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All three look pretty cheap, as discussed in the various threads.
Currently Berkshire.B trades at $202.33US, Brookfield $39.59CAD, and Fairfax at $350.24CAD.
Who performs the best over the next decade?
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Thanks for posting.
fyi this took place on January 29, 2020.
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I wonder why warren wouldn't continue to hold the 6% preferred with so much excess capital earning 1%. I guess it would be counted at over 10% ownership since the pref is technically equity.
gfp,
I thought the same. I'm speculating that this speaks to WEB's discipline in not accepting a return below whatever his hurdle rate is, even with 100B in his wallet ;)
-CM
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Thank you for taking the time to share.
Your writing style is superb and the content is very interesting!
-CM
Berkshire Hathaway Annual Meeting 2024
in Berkshire Hathaway
Posted
Thanks gfp. Can you or someone else explain the "First" paragraph and what it means that Charlie left everything to the Munger Community Property trust please? Does "priority to duty over property" indicate some sort of merit based system of distributing assets?