Mephistopheles

I agree, will likely give another opportunity to add if so inclined. Estimating roughly that the lions share of reform/recap done by next fall its very likely that still at these prices there is nearly a double for some of the preferred in 12 months time. Is there another option to lever this up outside of margin? Even at the most egregious margin rates alot of money can be made in 1 year here it seems. Buffett, Munger, Druck, Soros talk about that fat pitch and swinging for the fences. This seems like a pretty juicy one over the middle with a planned negotiation on paper from the counterparty regarding the security, a favorable court ruling, a motivated administration who just got the blessing of congress and pretty good chance captialization is kicked off by the end of the month with the NWS ending. But of course, everyone knows this and yet the market prices some of these as low as 40% of par today. And we have the government in plain English saying they are going to stop the NWS and recapitalize. So what is the market missing? Or what are we all missing? Is the major risk that this gets delayed past the election and Trump loses? Say Biden wins, he will probably bring back most of Obama's people (fellow traveler's) to the job. And this whole thing is dead and back to status quo. Is that the only major risk here? I'm sure Mnuchin is well aware of this. So why wouldn't he rush to get this done within a year? Is it even possible to raise $100 billion from start to finish that quickly? Either the market or we are very very wrong here.

M - Macy’s. I think 3 of their prime properties - Herald Square NY, State Street Chicago and Union Square SF are worth like half the EV of the entire company ($9 b as of today)

Buffett addressed the hypothesis that Brooklyn investor presented in one of the recent annual meetings. He and munger both said that it’s just a coincidence that cash/float ratio has been so steady over time. They basically said that if an elephant presented itself they’d pounce regardless of the ratio

I'll say once again (because nobody replied the first time), that I think Buffett is a more of a macro guy than we think. He thinks BRK is cheap, but just thinks there will be greater opportunities in the near future. Same reason he bought JPM, just not a whole lot.

Or maybe Buffett is more of a macro guy than we think. Maybe he sees an economic and/or stock market downturn. Total Market cap to GDP is nearly the level it was in the tech bubble, at least according to this: https://www.gurufocus.com/stock-market-valuations.php Take a look at his JPM purchase. Why spend $4 billion to buy shares but then not make it a full position? Seems he wants to nibble for now while making a market call. "do as I say, not as I do"

This is an example of a badly produced podcast. The talk is monotonous (single person, no dialogue) and the podcast is way too long. Not recommended, unless one is a Singleton junkie. I put it away for good after 20 minutes. +100 Glad I am not the only one who feels this way

treasury and fhfa will want to recap both GSEs, obviously, but from a new money investor point of view, I would rather put my money into Fannie than Freddie. whether this translates into a disparate pricing effect I know not Why do you think new money would want Fannie more?

If the terms of the new Senior Pref are good enough they might not care about their current Junior Pref position. But as long as they screw the current Juniors they handicaps the common stock capital raise. I think the smarter (in terms of capital raising), legally sound move is to treat the Juniors fairly.

Nothing stopping BRK from asking for a ridiculous coupon and getting it So you’re saying the companies recapitalize with prefs that supersede the juniors with a massive dividend and thus juniors can’t get their dividend which means we don’t come close to par ?

Not a luxury apartment by any means (at least when bought in 1996), but the appreciation of this real estate asset in Manhattan beats pretty much anything out there: https://www.ft.com/content/e46c1558-7ccf-11e9-81d2-f785092ab560 Can the creator of this thread correct the title. It hurts my eyes...please. Can you paste the text of the article? Can’t see it without an FT subscription

Macy's

Boilermaker, why you don’t short longer term put, say 1 year? The put premium will be taxed at long term capital gain and there is a higher chance it will expire worthless. The premium is higher if the date is very short? Also, if you are doing this in an IRA or 401K account, then the tax is not so much of a consideration? I use Merrill edge which doesn’t allow naked put writing in IRAs. Is this allowed with any other broker ?

Can anyone explain why Buffett can hold 17% of Amex but can’t go above 10% for other bank. In other words, why doesn’t Amex trigger the bank holding company requirement?

Since when does Berkshire sell businesses? This doesn’t make sense

It’s concerning to me that Buffett replied to a request for comment, when does he ever do that, especially regarding the stock portfolio?? Is he planning on selling Apple shares and wants to hold the price up? Why wouldn’t he want people to think that he himself is reducing shares? Presumably he’d only benefit if the stock drops due to repurchases or him buying more.

I wouldn’t ask for Barbie dolls. Nowadays they’re made fat. PC bullshit

I don’t know why you guys are so excited about Calabria. Yes he wrote the paper saying NWS is invalid, but he also seems to not be a fan of the “government sponsorship” in housing. A conservative bet would be that he’s neutral. Remember how Mnuchin is friends with Paulson and was going to free the GSEs? And how Paulson and Icahn were both advisors to Trump and how the shares tripled overnight after Trump got elected ? And here we are 2 years later. I know past is independent of the future but my guess is that there are multiple constituents and this is more complicated than it seems. I fear status quo may be easier to maintain than actively do something. Just trying to be conservative in my assessment.

Here's an article Calabria wrote for American Banker - he doesn't opine on the NWS, but rather the transfer of risk from the companies to external investors https://www.americanbanker.com/opinion/we-can-reduce-the-gses-risk-without-congress

What was Cisco’s P/E or EV/EBIT before it collapsed ?

Just added to my FB position. Finally got into the SHLD bonds eh? Which ones did you buy?

You sure about that? The owners of the companies that were involved in these practices paid massively. Many of employees were shareholders as well hence felt the pain. CEOs walked away with millions and incentives were for sure wacky, but a) they all did lose massive wealth, b) I believe CEO compensation incentives have improved since with greater claw backs.

John Hjorth, why is Ajit Jain not physically well? Anyway, I don't think Gates will be CEO. He left MSFT so he can spend full time at the foundation so it wouldn't make much sense. I also don't think it's Jain or Abel. Just because they're on the board doesn't mean they will be CEO. As longinvestor stated, I too think it will be someone who won't have to deal with anything operational. Think about it, Buffett spends 0 time on operations and he's the greatest capital allocator ever. Why give someone the CEO job now who will have to spend x % of their time on operations and thus less than 100% on capital allocation? Both Jain and Abel are experts in their respective industries, so why pull them away to run the rest of Berkshire. Better to give the gig to someone who does capital allocation for a living, someone like Ted and Todd. -It's their full time job right now anyway. -They have been involved in various acquisition roles (PCP for Todd, Detlev for Ted). -They're young as opposed to Jain who is nearing 70 It preserves the current set up - the chief capital allocator on one side and the operations on the other side. It doesn't mix up the two. The capital allocator can spend all of his time reading. No need for dividing time or for a management shake up at BH Energy which is poised to spend like $100 billion on capex in the coming decade - better to have Greg Abel focus on that. Of course better to keep Ajit focused on his insurance expertise. I also think it's easier to have the chief capital allocator be the chief investment officer so they can run all big investment opportunities through a single lens instead of having 2 parties compete for capital. Keeps things much smoother and is how Buffett operated all these years. Abel and Jain are the 2 most powerful people at Berkshire next to Buffett, so it makes sense they get their place on the board to keep the new CEO(s) in check. I've said this before. Am willing to bet a small $ amount with anyone that it will be Todd, Ted or a combination of the two.

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If they don't purchase it, it will not be for ROE reasons. $20 million is a drop in the bucket, and the purchase would be more for sentimental reasons kind of like the local newspapers. Having said that I am sure $20 m overvalues the building. Having Berkshire as a tenant means people might be willing to pay up for it.

I've been writing puts aggressively on Berkshire. My favorite is an $18 premium for $200 strike January 2020 put. Break even price $182...in 2020. Feel pretty good about that one