Mephistopheles

This topic comes up every now and then. People pay attention to what Buffett, T&T say, but don't really get what they do. If you're going to read a newspaper or 10-k cover to cover just for the sake of reading it, it's just wasted time and effort on your part. The point is that you need to know what to look at, at least with SEC filings. So out of those 200 pages in a 10-k, know what to look at and know what to skip over. Same with the newspaper. I highly doubt Warren reads the Lifestyle or Personal Journal section cover to cover. Or even all the political crap. But all that stuff is kind of obvious IMO. There's no way any human being can literally read 5 entire newspapers along with all the other stuff on a daily basis.

Right, I imagine Abel and Jain will have an even greater role not only within Berkshire but with Berkshire's relation with the rest of the world. It would be fitting for them to be up on the panel with the new CEO at the annual meeting for instance. And they'd be in control of acquisitions within their industries. I think we can all agree that it's impossible for one person to fill Buffett's shoes, but there can only be one CEO, shall be interesting to see. I hope we don't find out for a long long time though :)

I don't think the successor will be Jain. His job is very specialized and specific and would be good for him to focus 100% of his time on it. He's not an expert in a wide variety of industries. He generates float, but doesn't allocate it. He's also 65 and Buffett has said he wants the successor to have the job for a long time. My bet is that Weschler or Combs, or some combination of the two will get the job. They are the capital allocators, and will be responsible for investing all the float that Ajit generates. As opposed to Jain or Abel, they are familiar with multiple industries, naturally, as they are investors and not operators in a single industry. You can see Buffett giving them larger roles by making them each chairmen of a couple of Berkshire businesses. You can see their influence in acquisitions - for example PCP last year or ResCap beforehand. They're also based out of Omaha - Buffett has said the new CEO will have to relocate. Finally they're both young with a long road ahead of them. What I imagine happening is that both Jain and Abel will take a greater role in their respective areas. Maybe if Tony Nicely retires first, his successor will report to Jain, making Jain head of all insurance at Berkshire...rather than reporting to the new CEO/capital allocater. Maybe CEO of BNSF reports to Abel? But overall I think it's important to have the capital allocator and the investment officers be the same person or team as the job is two sides of the same coin. You can't have them fighting for capital. I bet Combs-Weschler duo will be the new Buffett-Munger, just not sure which one will be the Buffett.

It's one thing to recognize the power of incentives - billionaires fund candidate, candidate becomes President, it's not exactly a leap of faith to assume it helps the thesis. On the other hand, trying to decipher body language and vocal tone to figure out what people are thinking is really not helpful at all.

+1. as trump would say, sad! +1. Absurd speculation going on trying to mind read government officials. This is a 10,000 ft. bet. Does it sound illegal? Yes. Is the risk reward good? Yes. Then bet a small amount and forget about it.

That's true but remember most of the cases are not independent. Like all the district court cases...they seem to be following Washington D.C.'s lead.

I don't read every filing, but like to look at one 10-k before buying. Then when next year rolls around I just glance at the financials and earnings release, transcripts, presentations. Sometimes I don't even look at the 10-k, just the financials. Like Apple, it was so obvious to me, and as Scott pointed out, if you think about anecdotal or real life evidence, that can be much more useful than a 10-k. Then there are weird investments like ZINC where I looked at the 10-k, 10-q all of that. It wasn't a good buy but I can proudly say that paying attention helped me realize well before others that it was a shit show...and I sold with only a minor loss. Nothing fancy, just saw the gradual buildup of debt and capex all for one plant. Costs and delays that continued to surpass management's expectations. And lots of stock issuance. At the same time I failed to see the big picture, so I sold.

Sounds like Watt doesn't have the guts to really do what he is supposed to do. The interesting thing is that he actually considered suspending the payments. It's only a matter of time before the matter becomes really pressing.

Thanks cubsfan!

Would someone mind PMing the contact info for the Markel breakfast and for Whitney Tilson's parties so I can RSVP? Those are the events I usually go to along with YellowBRK. Other than that I don't know any more events.

Bump. Any ideas guys?

Geithner created the NWS, Lew continued with it. They both wanted exactly the opposite of recap, while recap is exactly what Mnuchin said he wants on mutliple occasions. I think Mnuchin is the opposite of Geithner and Lew.

Related question: Anyone have good investing/business/life book recommendations for children? I am going to a kid party where they specifically requested books as gifts

It's the game that's fun. Finding deals and profiting off of inefficiencies. Not work if you love doing it:

Are you sure about Buffett and AXP? My recollection is that he had like 2/3 or 3/4 of his portfolio in it. And Munger once had over 100% of his personal net worth in a Canadian Utility, though I forgot the details of that.

But that doesn't make sense because isn't it for the quarter ending 3/31? How do they know how much dividend there will be in the first place? Seems like they are just assuming. I wouldn't take that cum dividend number to mean anything re whether the NWS is reversed or not for this quarter.

Got it, thanks

If they indeed stop the NWS and no divy on March 31, when will we know? In the 10-Q or before that?

How? I looked at put options, the lowest is 842.5 strike for march 17. So sorry, a typo. I meant AMGN. Sold for an average price of $1. Lol

How much time before he starts talking about F&F? lol

Sean Spicer confirms that it was bullshit. Thoughts? Don't be naive. https://www.youtube.com/watch?v=GA6EnrOGWU4

watt of fhfa is on record as warning on depletion of GSE capital. went to deaf ears last year with Obama treasury. i can see mnuchin agreeing to defer receipt of dividends, and say that he talked to watt and they agree about need for GSEs to operate with capital. real simple, no handwringing and mudslinging, and no statement about eventual reform. I'm thinking the same thing. Frankly, accepting the dividend goes against everything Mnuchin has said thus far. It simply doesn't make sense, and oh, the companies also happen to be severely undercapped.

Anyone have any thoughts on the dividends on March 31? Think there's a chance they don't happen?

I know we're all value investors here but I can't help but recognize this obvious trading opportunity. Given the declines in recent weeks, the market is at most neutral on the shares. If the dividend goes through on March 31, I don't see much more or any further decline. However if the sweep is paused, imo that's an easy like 40% gain. Regardless of how shareholders ultimately prevail, Mr. Mnuchin has made it very clear that he wants the companies recapitalized. The market would send the shares shooting up if the NWS is paused, and I think there's a significant possibility of this given his comments. Assuming a 10% chance of no dividends to Treasury, makes a very interesting trade.

Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers. Self interest. The NWS is immensely profitable for the government right now, why give it up? Mnuchin works for the government now and Trump, who will need every penny he can get hold of for his projects? Why give away the goose who lays golden eggs now every 6 month? I would expect the governement trying to dump FNM/FRE when the housing market goes bad and these entities become liabilities for them. Monetizing the warrants and maximizing the value of the common equity is in their self interest. Who cares about golden eggs into perpetuity? Only the next 4 and maybe 8 years is what matters.