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Anyone wish to opine on Tilson's analysis?

 

For my part: Yes, it's a miss.

+1

 

Seen in the backdrop of Semper Augustus’s seminal work, this is weak.

 

To me, it's so true, what longinvestor is posting here. If you're interested in Berkshire, the Semper Augustus letters should catch your attention. [i have posted about them recently. - The B trading at around ~200, while intrisic value is estimated in the Semper Augustus Letters to be around ~250 for the B.]

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While I think Semper has done some great work on Berkshire, I'd say Tilson has provided a good service of updating this valuation over the years.  It makes sense, doesn't require 50 pages of explanation, and is within the range of a reasonable IV.  As Buffett says, you don't need a scale to tell if a man is overweight.

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"While I think Semper has done some great work on Berkshire, I'd say Tilson has provided a good service of updating this valuation over the years.  It makes sense, doesn't require 50 pages of explanation, and is within the range of a reasonable IV.  As Buffett says, you don't need a scale to tell if a man is overweight."

 

+1

 

Everybody has their misses: Tilsons hedge fund performance, his $3000 investing seminars and Semper Augustus discussion about

Index Funds.  ;)

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For those of us in BRK early, Tilson's updates were excellent. So, yea, Semper writeup is incredible in comparison, but if Tilson helped a lot of people from not selling BRK - he did them a huge favor.

It certainly worked in my case, and with many of my investees.

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Guest longinvestor

"While I think Semper has done some great work on Berkshire, I'd say Tilson has provided a good service of updating this valuation over the years.  It makes sense, doesn't require 50 pages of explanation, and is within the range of a reasonable IV.  As Buffett says, you don't need a scale to tell if a man is overweight."

 

+1

 

Everybody has their misses: Tilsons hedge fund performance, his $3000 investing seminars and Semper Augustus discussion about

Index Funds.  ;)

Well said. Semper sounded like the barber talking down the index. Those 50 pages I skipped right past to the 50 on Berkshire. To me, 50 pages of lucid details on Berkshire is alright if seen in the backdrop of MV being marked down relative to IV for year after year. He’s shouting, I can understand, so can others around here.

 

All that said, my rationale for preferring Semper versus Tilson is that T sounds awfully like a thesis based on price. Not entirely but substantially so.

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"While I think Semper has done some great work on Berkshire, I'd say Tilson has provided a good service of updating this valuation over the years.  It makes sense, doesn't require 50 pages of explanation, and is within the range of a reasonable IV.  As Buffett says, you don't need a scale to tell if a man is overweight."

 

+1

 

Everybody has their misses: Tilsons hedge fund performance, his $3000 investing seminars and Semper Augustus discussion about

Index Funds.  ;)

Well said. Semper sounded like the barber talking down the index. Those 50 pages I skipped right past to the 50 on Berkshire. To me, 50 pages of lucid details on Berkshire is alright if seen in the backdrop of MV being marked down relative to IV for year after year. He’s shouting, I can understand, so can others around here.

 

All that said, my rationale for preferring Semper versus Tilson is that T sounds awfully like a thesis based on price. Not entirely but substantially so.

While I think Semper has done some great work on Berkshire, I'd say Tilson has provided a good service of updating this valuation over the years.  It makes sense, doesn't require 50 pages of explanation, and is within the range of a reasonable IV.  As Buffett says, you don't need a scale to tell if a man is overweight.

For those of us in BRK early, Tilson's updates were excellent. So, yea, Semper writeup is incredible in comparison, but if Tilson helped a lot of people from not selling BRK - he did them a huge favor.

It certainly worked in my case, and with many of my investees.

 

Thank you for polite, mild and well reasoned push back. I had no idea that Mr. Tilson's work on Berkshire had this impact on several CoBF members holding Berkshire for the long term. Somehow, I feel embarrassed right now. Going forward, I'll try to be more humble.

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John - don't worry about it. You were civil about the whole thing, and we're all exchanging ideas here.

The Semper piece is fantastic, but in the absence of that, Tilson sharing his free research was commendable

and helpful to those that used it.

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John - don't worry about it. You were civil about the whole thing, and we're all exchanging ideas here. The Semper piece is fantastic, but in the absence of that, Tilson sharing his free research was commendable and helpful to those that used it.

 

Thank you, cubsfan.

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Not so flattering picture of BYD buses' performance in the LA area:

 

http://www.latimes.com/local/lanow/la-me-electric-buses-20180520-story.html

 

Actual range obtained seems to be about 1/3 rd of the advertised range. Only about 50 miles!

 

It actually reads a bit concerning, Munger_Disciple,

 

Somehow, tehnical specifications - here understood as "promises" to the BYD client, I suppose must the key here. I suppose everybody knows that there are a lot steep streets in Los Angeles. Isen't what matter actual range [while driving the busses in LA] compared to what a LA bus is actually driving per day? If the existing battery capacity isen't sufficient, isen't it just a matter adding more battery blocks under the floor of the bus, untill the [darn] thing actually can deliver as expected for that particular driving environment? [i'm not an engineer.]

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I don't know what average distance an LA city bus travels per day, but the average range of all the LA city buses (which are predominantly natural gas powered) is 385 miles. So the BYD bus gets 1/8th the range which seems very low to me. I am not a battery/bus expert but I don't think it is as simple as adding more batteries under the bus. A whole host of issues will need to considered: cost, extra weight, clearance, safety, charging times, etc...

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Guys,

 

I hadn't heard the story that Charlie Munger told on the CNBC interview about Warren and Charlie having the opportunity to purchase the french portion/division/interest in Costco many years back.  Charlie said that he told Warren to "close his eyes and BUY IT."  And Warren DID NOT/WOULD NOT buy it....

 

Does anyone know how much they would have made/profited had they purchased it?  How large was the sin of omission?

 

Thanks.

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This link is the registration statement for the block of Costco Stock in question (momentarily called "PriceCostco" for a year following the merger with Sol Price's Price Club):

https://www.sec.gov/Archives/edgar/data/909832/0000912057-96-010651.txt

 

The partner was a subsidiary of Carrefour, the French hypermarket company.  Carrefour owned 21.19 million shares, which was 9.7 - 10.8% of Costco around the mid nineties. 

 

The offering ended up being for 19.5 million shares in this registration statement, so you can assume the block that Warren had a chance at was probably the 19.5 million shares.

 

I'm sure you could find some online calculator to tell you the total return with dividends of 19.5 million costco shares from approximately May 23, 1996 to the present.  I assume there have been splits, but am not a Costco shareholder.

 

 

Guys,

 

I hadn't heard the story that Charlie Munger told on the CNBC interview about Warren and Charlie having the opportunity to purchase the french portion/division/interest in Costco many years back.  Charlie said that he told Warren to "close his eyes and BUY IT."  And Warren DID NOT/WOULD NOT buy it....

 

Does anyone know how much they would have made/profited had they purchased it?  How large was the sin of omission?

 

Thanks.

 

 

edit -- I think it's as simple as 19.5 million shares at a split adjusted 10 bucks per share in May 1996, say 195 million for Berkshire.  Without including dividends, the shares would be worth $3.9 Billion at 200/share today, 22 years later

 

second edit -- well I think the above is not exactly right.  The shares were 20.875 / share for the offering, which would have cost Berkshire $407 million bucks for 19.5 million shares.  They would now have 39 million shares at 200, so $7.8 Billion.  At least I think this is correct...

 

More or less this attached image ->

Screen_Shot_2018-05-26_at_12_33.00_PM.thumb.png.f0b89b862dad9676c43aca78faf3e54f.png

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This link is the registration statement for the block of Costco Stock in question (momentarily called "PriceCostco" for a year following the merger with Sol Price's Price Club):

https://www.sec.gov/Archives/edgar/data/909832/0000912057-96-010651.txt

 

The partner was a subsidiary of Carrefour, the French hypermarket company.  Carrefour owned 21.19 million shares, which was 9.7 - 10.8% of Costco around the mid nineties. 

 

The offering ended up being for 19.5 million shares in this registration statement, so you can assume the block that Warren had a chance at was probably the 19.5 million shares.

 

 

edit -- I think it's as simple as 19.5 million shares at a split adjusted 10 bucks per share in May 1996, say 195 million for Berkshire.  Without including dividends, the shares would be worth $3.9 Billion at 200/share today, 22 years later

 

second edit -- well I think the above is not exactly right.  The shares were 20.875 / share for the offering, which would have cost Berkshire $407 million bucks for 19.5 million shares.  They would now have 39 million shares at 200, so $7.8 Billion.  At least I think this is correct...

 

More or less this attached image ->

 

 

Wow, that is excellent and exceeds my expectations.  Those 2 crack me up.  Whats another $7-8 Billion between a couple buds..

 

Thanks again GlobalFinancialPartners!

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I believe it. It was convertible debt, expensive money for uber to gain buffett’s Halo effect. With optionality on the upside for brk. And warren wanted to do far more than 3 billion in size. Dara tried to talk him down to 2 billion. It sounds plausible.  I wonder what the interest rate was. 5-8%?  I didn’t see the rate on uber ‘s term loan

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ugh...I shouldn't jump to conclusions so quickly. I was thinking it was just regular private market shares or whatever.

 

I think I'm a little too cynical since the news floated the rumor that Buffett was buying GE a few months ago.

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I believe it. It was convertible debt, expensive money for uber to gain buffett’s Halo effect. With optionality on the upside for brk. And warren wanted to do far more than 3 billion in size. Dara tried to talk him down to 2 billion. It sounds plausible.  I wonder what the interest rate was. 5-8%?  I didn’t see the rate on uber ‘s term loan

You don't get to have the Halo for 2 billion principal. Halo effects start from $3 billion and up. You take $7 billion and you get to have Buffett show up next to you an CNBC.

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On a different note, does anyone have the full opening message from this?

 

https://www.marketwatch.com/story/warren-buffett-is-bullish-on-growth-in-american-living-standards-2018-05-30

 

For the exact wording, may have to check the book itself.

For the gist of the message, the following may be equivalent:

http://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/

 

As always, optimist but a hint at lower expectations and the need to address the Great Gatsby curve.

Mr. Buffett has said before that the equality of opportunity has been, for many, an "empty promise".

 

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