Buffett pitches Airbnb

[rogermunibond]

http://blogs.wsj.com/moneybeat/2014/04/08/buffett-will-steer-investors-to-airbnb-to-avoid-price-gouging-by-omaha-hotels/?mod=yahoo_hs

 

Airbnb has a new fan: Warren Buffett.

 

The billionaire investor is planning to mention the website at Berkshire Hathaway Inc.'s upcoming annual shareholders’ meeting on May 3 as a low-cost alternative for shareholders who don’t want to pay the jacked-up rates that Omaha hotels charge while the gathering is taking place every year.

[Buffetteer]

Great article, thank you. Have stayed at airb&b's several times and each was a great experience. Excellent way to save a lot of money and meet interesting people.

 

Unfortunately I am one of the suckers paying exorbitant fees to stay in Old Market this year, but in the past I've stayed as far away as Lincoln to save money.  ;D

[SouthernYankee]

When I looked at airbnb last year for the Berk weekend, I noticed that the rates were higher than they normally are for other weekends, just not as steep as the hotels. If he does mention them, I expect the rates to increase a little bit once again, since there is still a sizable difference.

 

That said, I am all for the competition. I am kicking myself that I did not wait until after the Super Bowl to start fixing up my house. I could have gouged some college frat kids and let them trash the place, since it got gutted anyway.

 

I'll file that under missed opportunities.

 

[adesigar]

This is one of the few things about Buffett that I simply do not understand. I know this is a board of BRK fans and while I like the company (25% of my portfolio) I think not having access to the Q&A via the phone or the internet for shareholders is a dumb/selfish decision on the part of Buffett. Is he seriously just now realizing that there are lots of small shareholders for whom spending the money to attend in person is a waste and would be better used to just buy more shares? The rich shareholders are better/more important than the little guy with maybe 10-100 shares?

[Hielko]

I don't think it matters at all. Are there really any good questions left that haven't been asked and answered already?

[adesigar]

I don't think it matters at all. Are there really any good questions left that haven't been asked and answered already?

 

Hmm let me think of a few quick ones. They may have been asked and answered but I don't remember them.

 

1. Why change the 5 year rolling period comparison changed to cycle for 2013?

2. Why was the buyback raise from 1.1x to 1.2x book not informed to all shareholders before the 1.2 Billion buyback from the "long-time shareholder"? Why were no shares bought on the open market? Will the increase in buyback to 1.3x book happen when another "long-time shareholder" needs to sell?

3. Why was BRK investing in bonds at the bottom of a generational low instead of loading up on stocks?

4. What was the thinking behind not selling KO in 1998 ? (I seriously cant believe that he didn't see it as overvalued then)

5. Why are we using the Berkshire Hathaway name for Home services? One subsidiary's success/failure/mistake/etc could affect the Brand Value of the entire company.

 

[ukvalueinvestment]

I don't think it matters at all. Are there really any good questions left that haven't been asked and answered already?

 

Hmm let me think of a few quick ones. They may have been asked and answered but I don't remember them.

 

1. Why change the 5 year rolling period comparison changed to cycle for 2013?

2. Why was the buyback raise from 1.1x to 1.2x book not informed to all shareholders before the 1.2 Billion buyback from the "long-time shareholder"? Why were no shares bought on the open market? Will the increase in buyback to 1.3x book happen when another "long-time shareholder" needs to sell?

3. Why was BRK investing in bonds at the bottom of a generational low instead of loading up on stocks?

4. What was the thinking behind not selling KO in 1998 ? (I seriously cant believe that he didn't see it as overvalued then)

5. Why are we using the Berkshire Hathaway name for Home services? One subsidiary's success/failure/mistake/etc could affect the Brand Value of the entire company.

 

Berkshire is far more shareholder friendly than pretty much any other corporation.  Warren and Charlie sit there for hours on end and answer any question they are given.  WEB takes meticulous care over his annual letter and gives you a vast amount of information.  And you are complaining that they aren't shareholder friendly enough??  What other company does what Berkshire do?

 

3) When do you mean?

4) I always thought he never sold for tax reasons?  And also, I guess, because Berkshire is so big it is extremely hard to trade in and out of the market.

5) Interesting question.  I sort of thought the same thing myself.

[Ian L]

For the buyback at 1.2 times book value, is the book value the last reported book value, or the book value on the day of the buyback?

[Guest deepValue]

I don't think it matters at all. Are there really any good questions left that haven't been asked and answered already?

 

Hmm let me think of a few quick ones. They may have been asked and answered but I don't remember them.

 

1. Why change the 5 year rolling period comparison changed to cycle for 2013?

2. Why was the buyback raise from 1.1x to 1.2x book not informed to all shareholders before the 1.2 Billion buyback from the "long-time shareholder"? Why were no shares bought on the open market? Will the increase in buyback to 1.3x book happen when another "long-time shareholder" needs to sell?

3. Why was BRK investing in bonds at the bottom of a generational low instead of loading up on stocks?

4. What was the thinking behind not selling KO in 1998 ? (I seriously cant believe that he didn't see it as overvalued then)

5. Why are we using the Berkshire Hathaway name for Home services? One subsidiary's success/failure/mistake/etc could affect the Brand Value of the entire company.

 

Question 1 will be asked.

Question 2 is unimportant. Bought in a privately-negotiated sale for 1.16x book. Anyone who wanted more money for their shares could have simply not sold on the open market.

Questions 3&4: LOL. A guy with fewer than 100 shares who cannot afford to go to Omaha is questioning Buffett's investing acumen (in hindsight, no less).

Question 5: Might be asked, but not an actual threat. Are people really going to stop flying NetJets because of a scandal at Home Services?

 

There: all your questions for Buffett answered and you didn't even have to fly to Omaha :)

[adesigar]

I don't think it matters at all. Are there really any good questions left that haven't been asked and answered already?

 

Hmm let me think of a few quick ones. They may have been asked and answered but I don't remember them.

 

1. Why change the 5 year rolling period comparison changed to cycle for 2013?

2. Why was the buyback raise from 1.1x to 1.2x book not informed to all shareholders before the 1.2 Billion buyback from the "long-time shareholder"? Why were no shares bought on the open market? Will the increase in buyback to 1.3x book happen when another "long-time shareholder" needs to sell?

3. Why was BRK investing in bonds at the bottom of a generational low instead of loading up on stocks?

4. What was the thinking behind not selling KO in 1998 ? (I seriously cant believe that he didn't see it as overvalued then)

5. Why are we using the Berkshire Hathaway name for Home services? One subsidiary's success/failure/mistake/etc could affect the Brand Value of the entire company.

 

Question 1 will be asked.

Question 2 is unimportant. Bought in a privately-negotiated sale for 1.16x book. Anyone who wanted more money for their shares could have simply not sold on the open market.

Questions 3&4: LOL. A guy with fewer than 100 shares who cannot afford to go to Omaha is questioning Buffett's investing acumen (in hindsight, no less).

Question 5: Might be asked, but not an actual threat. Are people really going to stop flying NetJets because of a scandal at Home Services?

 

There: all your questions for Buffett answered and you didn't even have to fly to Omaha :)

 

Firstly this was in response to what questions are left to ask and I came up with those in 5 mins. Secondly you didn't answer anything.

 

Question 1 - We shall see if its asked and if it gets a genuine answer.

Question 2 is important. Buffett has said he never purchased in the past because he wanted to let all shareholders know BEFORE he made any transaction and the resulting increase would make it impossible to actually do the buyback. So why this arbitrary increase and special treatment for just 1 shareholder?

Question 3,4 - You assume I own fewer than 100 shares and that I cannot afford to go to the annual meeting. It takes one share to attend the Bekshire meeting. A Shareholder is a Shareholder. And Its not hindsight. I was wondering why BRK wasn't buying shares when GE, AXP, GS, WFC etc etc were at all time lows. It annoyed me that BRK wasted an amazing opportunity in 08-09.

Question 5 - Its not a question of actual threat as I said in comment its also success. Question is why? Does the name help bring in more business and is the increase in business or possible increase in brand value worth the possible risk. I personally used Homeservices when I bought my current home and was very happy. Also something I noticed it might not be accurate but every subsidiary company used to identify themselves as a Berkshire Hathaway subsidiary. I think after this name change of Homeservices that reference to "A Berkshire Hathaway subsidiary" seems to be missing.

 

Personally Id rather take my kids to Disneyland than attend the meeting although for some on this Board the BRK annual meeting might be Disneyland :) .

[SouthernYankee]

"I was wondering why BRK wasn't buying shares when GE, AXP, GS, WFC etc etc were at all time lows. It annoyed me that BRK wasted an amazing opportunity in 08-09."

 

-As far as I saw, he was making deals that were MORE valuable than simply buying shares, with less risk as well. I could definitely be mistaken about that, but I don't think I am. The BAC transaction alone is a huge home-run!

[Liberty]

The BAC transaction alone is a huge home-run!

 

That was in 2011, though.

 

http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1600359#fbid=S7hVyiigUpF

[Buffetteer]

3. Why was BRK investing in bonds at the bottom of a generational low instead of loading up on stocks?

4. What was the thinking behind not selling KO in 1998 ? (I seriously cant believe that he didn't see it as overvalued then)

 

Here is the greatest investor in the history of investing and we're gonna pick apart a couple of moves that we don't agree with? It's like complaining about Michael Jordan missing a layup...once...25 years ago.

 

And how can you say it's not in hindsight...it happened in 1998?

 

But, having said that, although I may disagree with your questions, you and I and everyone else has the right to ask them, regardless of how many shares we own or weather or not we can afford to go to Omaha. To suggest otherwise is incredibly insensitive, inappropriate and offensive.

[shalab]

1. Why change the 5 year rolling period comparison changed to cycle for 2013?

 

The 5 year comparison to SP500 and other insurance companies is in page 108 of the annual report. ( I got mine this week )

 

[Guest deepValue]

But, having said that, although I may disagree with your questions, you and I and everyone else has the right to ask them, regardless of how many shares we own or weather or not we can afford to go to Omaha. To suggest otherwise is incredibly insensitive, inappropriate and offensive.

 

Just to solidify your image of me as an a-hole, I'll point out that you forgot a comma after 'inappropriate.'

 

My references to adesigar's apparent net worth were to demonstrate his relative lack of investing experience and success. A relatively inexperienced investor criticizing one of the all-time greats for not knowing that Coca-Cola was obviously overvalued in 1998 is rather humorous. You essentially made the same argument in your post.

 

Buffett probably held on for tax reasons, but he must have expected more than the ~2% annual return since June 1998. Hindsight is a gem.

[ukvalueinvestment]

How ironic.  It's grammatically incorrect to put a comma before "and".

[Guest deepValue]

How ironic.  It's grammatically incorrect to put a comma before "and".

 

Maybe the rules are different across the pond. In the U.S., you put a comma after each item in a list. There are other instances in which a comma should appear before "and" as well.

 

We also put punctuation inside the quotes. :)

[adesigar]

But, having said that, although I may disagree with your questions, you and I and everyone else has the right to ask them, regardless of how many shares we own or weather or not we can afford to go to Omaha. To suggest otherwise is incredibly insensitive, inappropriate and offensive.

 

Just to solidify your image of me as an a-hole, I'll point out that you forgot a comma after 'inappropriate.'

 

My references to adesigar's apparent net worth were to demonstrate his relative lack of investing experience and success. A relatively inexperienced investor criticizing one of the all-time greats for not knowing that Coca-Cola was obviously overvalued in 1998 is rather humorous. You essentially made the same argument in your post.

 

Buffett probably held on for tax reasons, but he must have expected more than the ~2% annual return since June 1998. Hindsight is a gem.

 

So you are saying you couldn't find a valid argument so you thought a persons net worth are somehow linked to the validity of his question.  Buffett answers questions from students so why not from small shareholders. You completely ignored the main point of contention which was not KO and 2008 decisions it was that small shareholders should not have to make a pilgrimage or attend what has become a circus or over pay for flights/hotels to get access to management because they have some bias against shareholders accessing it from the internet/phone. Some of my sample questions shareholders might want to ask were answered recently Check Question 15 and Question 17 in the pdf linked in the topic below.

 

http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/web-talks-to-students-transcript-20140131/

 

About 2008/09. Its not hindsight because I remember being really annoyed by some of the Bond deals back then but no increase in BRK stock holdings.

 

About KO. Buffett has acknowledged he made a mistake not selling KO. The question again was Why? Tax could be one reason but my personal thinking is he has an attachment to KO that prevented him from selling even though he knew it was overvalued. I  know I did the same thing with regards to LUK. Didn't sell when it was $50. Followup question would be, How to avoid this?

 

 

[Buffetteer]

Just to solidify your image of me as an a-hole, I'll point out that you forgot a comma after 'inappropriate.'

 

Are you talking about an Oxford Comma???  "Who gives a f*#k about an Oxford comma?" (some of you will appreciate the Vampire Weekend reference, I'm sure)  ;)

 

But seriously, the fact that you even felt the need to point that out??.....wow!!! 

[Martian]

 

About KO. Buffett has acknowledged he made a mistake not selling KO. The question again was Why? Tax could be one reason but my personal thinking is he has an attachment to KO that prevented him from selling even though he knew it was overvalued. I  know I did the same thing with regards to LUK. Didn't sell when it was $50. Followup question would be, How to avoid this?

 

afaik,  he did not sell because he was on the board.

[RichardGibbons]

Here's my favorite example of why the Oxford comma is good.  (Warning: slightly NSFW).

 

http://imgur.com/fycHx

 

[Mephistopheles]

 

Questions 3&4: LOL. A guy with fewer than 100 shares who cannot afford to go to Omaha is questioning Buffett's investing acumen (in hindsight, no less).

 

 

 

 

Here is the greatest investor in the history of investing and we're gonna pick apart a couple of moves that we don't agree with? It's like complaining about Michael Jordan missing a layup...once...25 years ago.

 

Asking questions about mistakes (or perceived mistakes) does not equal complaining.

 

Asking a great investor questions about investing, by definition usually means that you are not as good of an investor as he is. That's the whole point of a Q&A.

 

Putting someone down who has valid questions, just because they are about mistakes, ironically goes against much of what Buffett has preached in regards to investing, about always thinking about the downside, etc. He himself says that he wants tough questions, rather than easy ones. As a value investor he recognizes the importance of understanding your past mistakes rather than being blind to them.

 

What is also ironic about this whole conversation is that Buffett has specifically stated that he doesn't give special treatment to large shareholders, and he wants to cater to the small ones just as much as he does to the large ones. Whether or not an investor owns 100 shares, 10 million shares, or 1 share, matters to many CEOs, but not Buffett.

[Buffetteer]

Here's my favorite example of why the Oxford comma is good.  (Warning: slightly NSFW).

 

http://imgur.com/fycHx

 

LOL...Nice!