Buffett/Berkshire - general news

[coffeecaninvestor]

There are in my view a few factors that none of us have that Buffett has, and I think it’s irrational for anyone to judge someone negatively for having done what he did. 
 

He is the steward of capital for many shareholders, and at his ripe age does not have the same time to recover any losses for them if he were to make a huge error. 
 

He also is one of the largest insurance companies and besides being regulated he needs to be 100% sure he can make good on his promises. 
 

I think there is a large difference in how Buffett would invest his own money and how he runs Berkshire. We can continue to argue how he screwed up, but it’s a waste of time.. sure he might have made a few more percent if he bought versus sold, but Berkshire has done more than fine since the bottom despite the “mistake” (even though both Buffett and Munger admit they make tons of mistakes). 

 

 

[Libs]

Didn't Buffett kind of freeze up when the GFC hit too? Yeah, he cut some nice 10% GS - type deals, but they were small, and he later admitted, IIRC, he used a thimble instead of bucket?

 

Found the quote from the 2010 letter:

 

Buffett recalls that last year’s letter called corporate and municipal bonds “ridiculously cheap” compared to U.S. Treasuries.  And we says Berkshire did “back” that view by making some purchases, but “I should have done far more.  Big opportunities come infrequently.”

[Gregmal]

27 minutes ago, coffeecaninvestor said:

There are in my view a few factors that none of us have that Buffett has, and I think it’s irrational for anyone to judge someone negatively for having done what he did. 
 

He is the steward of capital for many shareholders, and at his ripe age does not have the same time to recover any losses for them if he were to make a huge error. 
 

He also is one of the largest insurance companies and besides being regulated he needs to be 100% sure he can make good on his promises. 
 

I think there is a large difference in how Buffett would invest his own money and how he runs Berkshire. We can continue to argue how he screwed up, but it’s a waste of time.. sure he might have made a few more percent if he bought versus sold, but Berkshire has done more than fine since the bottom despite the “mistake” (even though both Buffett and Munger admit they make tons of mistakes). 

 

 

I dont think thats whats going on though. Whats being highlighted is simply to combat the widespread and rampant "this is what Buffett is saying or doing" stuff thats often thrown out as an excuse for taking a position. First rule of investing isnt as Buffett says "dont lose money", its "think for yourself".

[thepupil]

17 hours ago, Blugolds said:

Also important to remember that Buffetts #1 priority is to protect the base, protect the shareholders..hindsight is 20/20 now re covid but at the time you’ll remember that there were daily tally’s and updates regarding fatalities, Ackman was crying on MNSBC telling the gov to shutdown to protect his dad, and they were parking Hospital ships in the NY harbor for extra beds..hindsight says that was a crazy overreaction and everyone should have been buying hand over fist…but AT THE TIME it was anybody’s guess as to how bad this would be and what would be the result, and when we would get control of it, the entire world was in chaos, every country.

 

At least to me, it seems reasonable that someone who’s primary objective is to protect the base, shareholders money and remain the “Fortress” that is BRK would come out of the other side looking like they behaved “too conservatively” that is the luxury we have of coming out the other side relatively unscathed, to be able to say hey, the old man goofed…vs he hit it out of the park and made bank, you’ll probably never be able to say that about BRK, hey they took advantage of the opportunity, took the gamble and it paid off, made the intelligent bet when everyone else (the entire world) predicted doom and gloom and are richer for it. BRK goal is respectable returns while mitigating against significant loss of capital so by its very nature it will never ever make the sexy bet/call and as a shareholder you’ve gotta expect that and be Ok with it. 

 

If you’re primary goal is remain the fortress and protect shareholders from extreme loss of capital, it 100% logical that you would behave as Buffett did when the entire world is in chaos, there is no end in sight and it still hasn’t played out as to how bad it will be and how significant the impact will be. He errors on the side of caution and doesn’t swing for the fences if there is even 1% that it will be a detrimental blow to BRK. Didnt know the fed would be as aggressive as it was, it could have also been another GFC or worse and then people would have been saying why was he such a shmuck leaving so much exposure for BRK. 

 

 Just playing devils advocate here, but it’s easy to forget what the viewpoint AT THE TIME was compared to what we know now and its easy to Monday morning QB that today. Do I wish he would have been a little less conservative and taken advantage of opportunities…yes, but I also understand why he didnt and Im ok with it. 

agree completely. we were but a few days from significant stress in funding markets and further margin calls/deleveragings etc. my fam owns 7 figs of Berkshire. I didn't want or think an insurer should be aggressive at ALL in 2020. there was tons of uncertainty on potential losses as I recall. I certainly didn't have clarity on that. we had no idea how quickly vaccines would be approved, how long it'd take for society to "re-open". honestly, if he was super aggressive, I'd have probably sold the stock.

 

berkshire isn't meant to make one rich. it's meant to keep one rich. the communication on this has been pretty clear for a long time IMO. Lots of people w/ huge concentrations in the stock. it's not some run of the mill company that people have 5% of their net worth in. 

 

I bought PSH who was getting aggressively long in restaurants and hotels and was levered and at a big discount. I understood ackman's aggression and wanted some of that (at a certain size). I did NOT want Berkshire doing that. 

 

and as it turns out they had plenty of firepower in the form of their huge AAPL position which made a shit ton and they've monetized/derisked that substantially. Berkshire has slightly beat SPX over the last 5 years and within a hair over last 10 and slighlty above in last 20 and generated a good absolute return over all time horizons. not really sure there's anything to complain about that. 

 

Edited yesterday at 08:04 PM by thepupil

[coffeecaninvestor]

14 minutes ago, Gregmal said:

I dont think thats whats going on though. Whats being highlighted is simply to combat the widespread and rampant "this is what Buffett is saying or doing" stuff thats often thrown out as an excuse for taking a position. First rule of investing isnt as Buffett says "dont lose money", its "think for yourself".

Yes, I completely agree. If you can’t think for yourself then just buy an index fund. There’s no shame in that it’s a perfect way to get rich enough to retire. I just think Buffett has different sets of rules,  values, and objectives than the individual investor. I think when you ride coattails you need to understand that, and not take anyone’s actions or words as gospel.  

[LC]

5 hours ago, Gregmal said:

Things were so extreme and emotional in Spring 2020 that there was only one direction we could have gone, and that was up. It was so screamingly obvious then, almost as much as it is in hindsight. I know plenty of people even on this board who murdered it. Was one of those generational setups. 

 

It was - Berkshire (my value market indicator) at what like 170? Such a skewed risk reward.

 

Either the world falls apart or it doesn't. Just bet everything but the house on the world not falling apart. Leaps on everything. Should've bet the house too, not like the bank could've come to repossess it without getting within 6ft

[cubsfan]

6 hours ago, Gregmal said:

Things were so extreme and emotional in Spring 2020 that there was only one direction we could have gone, and that was up. It was so screamingly obvious then, almost as much as it is in hindsight. I know plenty of people even on this board who murdered it. Was one of those generational setups. 

 

It was so true. It took me a few months to come out from under that table. And it ended up being almost as good as 2009. 

 

But I do think @Blugolds is right. Buffett predicament was more difficult considering his safety first promise to shareholders. Berk did fine, when he probably could have really killed it.