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Three Ways Warren Buffett Is Not A Typical Billionaire

JAN 31, 2017

1. His home:

2. His car:

3. His diet:

 

“In my entire lifetime everything that I spend will be quite a bit less than 1% of everything I make,” Buffett explains in the documentary. “The other 99%-plus will go to others because it has no utility to me, so it’s silly for me to not transfer that utility to people who can use it. It’s doing me no good.”

 

https://www.forbes.com/sites/chasewithorn/2017/01/31/three-ways-warren-buffett-is-not-a-typical-billionaire/#67ab0ce03610

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Here's an article that discusses some of Clayton's recent acquisitions - they've basically hit a wall in terms of manufactured home market share so have been diversifying into site-built communities...  Hope it goes well for them -

http://www.builderonline.com/builder-100/strategy/why-sell-to-clayton_o

 

And another on Homeservices' growing title insurance business

http://westfaironline.com/85707/homeservices-of-america-adds-houlihan-lawrences-title-agency/

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Bill Gates and Warren Buffet at Columbia University - 27th Jan 2017

 

https://www.youtube.com/watch?v=8K9QvPGHug0

 

Mr Buffet looks a bit chubbier than his previous appearances.

 

May good health stays with him for another decade and beyond!

 

IMO Buffett gained some weight because he is disappointed with the Presidential election result, and that’s an understatement.

Some of Warren and Susie Buffett’s gifts to society have gone to areas opposed by Trump’s program:

 

- public schools

- supporting independent journalism

- access to safe abortion

- refugee support service

- promoting democracy internationally

- LGBTQ rights

- migrant worker rights

- nuclear disarmament

 

“I’ve taken the view that each of us can be bystanders, or we can be upstanders. I choose upstander.” Seth Klarman
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Guest longinvestor

No PR yet, but similar to prior years, we are two weeks away from the release of the letter and Q4 and FY 2016 results. That will get me out of my ennui.

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... That will get me out of my ennui.

 

:-) In a few days there will be the 13F-HR to study and talk about on here. Digesting a few Howard Mark's memos and thinking about their contents also helps to get out of some kind of feeling of missery, or boredom while waiting - diversion of the mind, based on placebo... It works for me. I also use the Semper Augustus client letter that way - less placebo, more BRK.

 

Beeing invested in BRK long term actually screews up your hierarchy of needs.

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Beeing invested in BRK long term actually screews up your hierarchy of needs.

 

Be of good cheer my long distance friend!

 

Berkshire provides customers with all of their physiological needs:

 

Air - NetJets 😜

Water - Boats US 😜

Food - Kraft Heinz, Dairy Queen, CTB & of course See's

Shelter - Clayton, Johns Manville & MiTek, etc.

Safety - via a myriad of insurance products

 

(Not to mention covering you arse with Fruit of the Loom)

 

Berkshire provides a path for self actualization & self esteem for employees & "Here's to Love" with Helzberg Diamonds!

 

Now if it'd just trade down to 1.2 or below (I probably shouldn't wait but I'm a tightwad...)

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Buffett mentioned that he would be writing "a lot" about fees charged by active managers in the upcoming annual letter.

 

Too many Buffett disciples charge way too much. Even the oft-touted Ruane, Cunniff & Goldfarb (Sequoia Fund) ... 1%+ for essentially a large cap fund. Why not 0.50%....?

Yes! On second thought, why not do it for free? Maybe they can sell ads on the investor letters and sponsor the annual meeting.

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Buffett mentioned that he would be writing "a lot" about fees charged by active managers in the upcoming annual letter.

 

Too many Buffett disciples charge way too much. Even the oft-touted Ruane, Cunniff & Goldfarb (Sequoia Fund) ... 1%+ for essentially a large cap fund. Why not 0.50%....?

Yes! On second thought, why not do it for free? Maybe they can sell ads on the investor letters and sponsor the annual meeting.

 

Lol +1

 

Meanwhile Buffett's fees were huge as a % of assets (well deserved).

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Well that's one way to win in mayonnaise...  Definitely a role for Berkshire to play in a deal this size - and if the structure results in Berkshire going below the threshold for Equity Method accounting of KHC it would bump Berkshire's reported book value and buyback threshold's by a bit.  Will be interesting to watch

 

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globalfinancepartners,

 

The headline of the article is actually to some extent misleading, because it does not indicate, that the proposal was turned down, but that is mentioned in the article. And yes, depending on the structure, this could really move the needle for BRK.

 

I also find the article interesting, because the content of the article gives some indication of, what's passing the desks of Mr. Buffett and Mr. Munger of potential stuff. This is [was?] huge.

 

This could not take place without the involvement of both BRK at top level and the 3G people. Those 3G people are really into the space of huge deals now.

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Guest longinvestor

globalfinancepartners,

 

The headline of the article is actually to some extent misleading, because it does not indicate, that the proposal was turned down, but that is mentioned in the article. And yes, depending on the structure, this could really move the needle for BRK.

 

I also find the article interesting, because the content of the article gives some indication of, what's passing the desks of Mr. Buffett and Mr. Munger of potential stuff. This is [was?] huge.

 

This could not take place without the involvement of both BRK at top level and the 3G people. Those 3G people are really into the space of huge deals now.

 

Actually, the large theme called out by Buffett and Munger over the past few years is the definite threat to packaged consumer goods, the tug of war between store and marquee brands. Cost cutting and consolidation are key ingredients. Plus at these sizes, fix-and-flip is difficult. After all we're talking about 100 year brands. Why Berkshire and 3G stand unique at the table.

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  • 2 weeks later...

Thanks for posting the transcript.  I was asleep for the first part and it was interesting to hear him describe his shorting DOW common in anticipation of their conversion.  He ended up timing it perfectly, with a net zero position the day after they sent him 72 million shares -

 

----------------------------------------------------------

 

"Quick: The reason I ask-- that question just now is because Dow Chemical preferred shares-- they called those the preferred shares on December 30th. And from what I read it said that it should've translated into about 6 percent of the shares outstanding of the company—

 

Buffett: 70, 72 million shares, yeah.

 

Quick: But I did not notice Dow Chemical on the 13-F in this most recent filing. Would have--

 

Buffett: We timed our sales so that once it got above the conversion price-- we timed our sales-- we tried to time 'em—because 72 million shares would be a lot of shares to get and we did not want to own the common stock we don't own any common stocks of any chemical companies so and as the stock when higher we sold it more aggressively because we wanted to get 72 million shares done by the day which was becoming more probable all the time that they would call it and they called it exactly when we thought they would call it. And I think our last shares were sold the day before, the day after, the same day we timed it to be out of 72 million shares when we received those shares.

 

Quick: So I was going to say you didn't sell 72 million shares on December 30 and 31st

 

Buffett: No we didn't want to be in that position.

 

Quick: but you had been timing those shares all along and preparing for it.

 

Buffett: exactly and it became you were in a very strong market and as Dow kept moving up we would get more aggressive so towards the end we might have been selling a couple million shares a day when it got up to 56 or some price like that. We were hoping to get out of it, out of the common by the time they sold the common and like I said it worked out to the day we were kind of lucky on that we could have ended up with 10 million shares but we were going to quit obviously when we got to the amount that was going to be handed to us.

 

Quick: Why don't you like Dow or the other chemical shares?

 

Buffett: We've never owned chemical shares. We own a specialty chemical company Ebersol a chemical common stock we own we bought the preferred stock of Dow because we wanted a preferred position and we held it. It was kind of interesting we bought that stock in July of 2008, the preferred and they were going to acquire, Dow was going to acquire Rohm & Haas and they needed money for it and then the world fell apart in the fall and Dow wanted to get out of the contract, they sued Rohm & Haas to get out of the contract but it was held that they had to stick with it. So we closed the deal to buy the preferred stock in April of 2009 by which time the market had totally disintegrated the time we closed that we bought $3 billion worth it probably wasn't worth tops more than

60 cents on the dollar so we showed up with $3 billion for something that was worth $1.8 billion at the time which is one reason why people offer us deals they know we will be around at the closing. We showed up for the Wrigley closing too that was on October 4 or something but during that whole period we had commitments and that kept me from doing some other things we might have done at that time. The fact that we had this $3 billion going out the door

 

Quick: What did you ultimately end up making on Dow Chemical shares.

 

Buffett: we ended up making about a billion dollars and plus we had an 8.5 percent coupon those years.

 

Quick: You made a billion even before the preferred dividend that was paid?

 

Buffett: We had a billion dollar of capital gain very roughly, and then we had $255 million a year dividends during the time we owned it."

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Total BV 31.12.2016 = 283,001 B

 

Add to adjust KHC till 31.12.2016    13,1 B  for fairvalue

 

Add further till today (Jan+Feb+1March):

 

Add for Investment gains app        12,4 B    (Appel accumulation before 30th Jan, KHC, BAC warrents incl.)

Add for Operative Jan+Feb app        3,0 B

 

TOTAL BV today                          311,501 B

 

This means BV per B share on 1. March 2017 = app 126,30 $ (KHC adjusted)

 

If its correct 177,28 $ (B closing price yesterday) is 40 % over (KHC adjusted) BV and seems still cheap to me.

 

ATTENTION: deffered taxes are not embedded. Also unknown subjects from 1th Jan till today. Imo it is not possible to calculate an exact figure; so all is just approximatly...

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