Semper Augustus

[Charlie]

John Hjorth

 

The most money manager are far, far worse. So don´t criticize these ones who write something valueable. 

Additional "doing nothing" is a very important concept as an investor.

If he focus his thoughts with writing in his "doing nothing" time there is nothing wrong with it.

In the end it´s his track record that counts.

 

[John Hjorth]

@Charlie,

 

Please read between the lines of my post. I'm simply just grumpy because I have never downloaded the Semper Augustus letters in a systematic way and saving them, because I did not expect this change in access to them ever to happen. 

 

Personally I've always considered the letters high quality related to Berkshire.

 

- - - o 0 o - - -

 

After looking at it for some time I found the following :

 

The fact also is that they are still available on the website, please visit:

 

https://www.semperaugustus.com/clientletter , and

https://www.semperaugustus.com/client-letters .

 

Perhaps this is a change for the 2022 letter and going forward, the letters earlier released then will go dark?

Edited December 27, 2022 by John Hjorth

[ValueMaven]

Chris is extremely thoughtful with his time and is anchored in VALUE.  I am a fanboy

[Xerxes]

On 12/26/2022 at 11:22 PM, John Hjorth said:

 

Thank you, @Xerxes,

 

You're right, i.e. same observation for me.

 

Personally, I have enjoyed tremendously Mr. Bloomstrans Berkshire writing for years now, but since I read his first letter, always have been thinking about the below mentioned.

 

There was no way with regard Mr. Bloomstrans public appearance and behavior [public letters for clients, twitter appearance , interviews, etc.] during the last years that he would not be approached by one or several of his LPs asking him challenging questions about his time allocation, confronting him with questions about if running a fund with external partners with USD 330 M in assets is considered by Mr. Bloomstran as a part time job.

 

There is a difference between being an investor, a writer, a money manager, a GP in a fund or a sermonator when you're a Berkaholic.  In my opinion, there are lots of people out there who can't relate to their role and assumed responsibilities, related to actual own behavior.

 

Somehow, it's all about ticket selling or personal branding, most of the cases "I'm good in this I'm doing, so now I'm going to make money on that as a writer [, too, $X pr. month pr. subsciption]", forgetting what I was actually doing in the first place, and getting paid for doing before this "misperception".]

 

I simply can't remember how many of these "writers" I have seen run out of steam in the last decade.

 

 

the letters are great. But the time allocation to it is odd vs the rest of its portfolio. 
 

I don’t have any direct investment with Mr Bloomstrans, so perhaps none of my business , but my selfish side would want him to write about his other positions as well. I recall few years ago he briefly wrote about Starbucks, Walt Disney, Costco    . That was nice. More if that. 

[Xerxes]

I think the Semper 2023 letter is released the day before BRK letter. 
 

So coming soon 

[throw123]

its out

[Gamecock-YT]

149 pages lol

Edited February 24 by Gamecock-YT

[John Hjorth]

Impressive, as always.

 

He has 2023 intrinsic value of Berkshire per B share at USD 479 [p. 114].

 

From what I have read on Twitter, Mr. Bloomstran has been going through a full hip transplant in early December 2023. Alone in that light and context,  an impressive piece of work.

 

Such thing happening obviously does not cause the cock to drop from the stick.

 

Many of the topics he has taken up this time in the letter appear more interesting to me than the topics in earlier letters.

 

I look forward to the read at a later moment.

 

- - - o 0 o - - -

 

Semper Augustus Investment Group LLC - 2023 Letter to Clients [Link].

[Luke]

Always a great read...! 

[Jaygo]

The China section is mind boggling. I have no clue how it all plays out but a halving of population in 50 years is certainly going to cause some havoc. My e it works out like for the Japanese or maybe it doesn’t. 
 

I really enjoyed the letter this year. The detail on brk is so valuable to me, you can really get a grasp of the business and potential valuation. 

[formthirteen]

10 minutes ago, Jaygo said:

The China section is mind boggling. I have no clue how it all plays out but a halving of population in 50 years is certainly going to cause some havoc. My e it works out like for the Japanese or maybe it doesn’t. 

 

LOL:

 

 

IMO, China has hit the "communist plateau"; copying technology only gets you so far, after that culture takes over. China's decline will only increase going forward as they continue meddling with citizens and private businesses and the effect from the CCP "one child policy" instated in the 70s and 80s increases, malinvestments increasing the decline even more. Most of the world's innovation still seems to come from the US.

[Jaygo]

4 minutes ago, formthirteen said:

IMO, China has hit the "communist plateau"; copying technology only gets you so far, after that culture takes over. China's decline will only increase going forward as they continue meddling with citizens and private businesses and the effect from the CCP "one child policy" instated in the 70s and 80s increases, malinvestments increasing the decline even more. Most of the world's innovation still seems to come from the US.

 

I'm sure the Chinese are plenty inventive and innovative but i would imagine most would try and get to more open societies in Asia or elsewhere before unveiling their IP.

Having the fear of pissing off the CCP must push away a lot of their best and brightest.

 

And yes the letter has lots of humour, some of it lands and some of it doesn't but he certainly tries.  

 

[Cigarbutt]

Impressive amount of info indeed but recovering from a hip replacement is not what it used to be.

There were some comments about profit margins (overall market and some specific companies). Mr. Bloomstran suggests that we've seen a peak in margins but this is a dangerous area to forecast it seems.

Below is a graph suggesting that the NPM/GDP ratio has entered a new era with a positive slope instead of the cyclicality within a "band of normalcy" from decades before?

Below is what Mr. Buffett included in his 'market valuation and rational expectations' 1999 article.

It's hard to forecast even if the underlying reasoning is sound. 

-----

In the letter, there is a section showing that many BRK's subs have benefitted from rising profit margins in the last 20 years. Not Geico however, which showed a variable margin (combined ratio) over time; its value was more into growth and resilience (although many predicted an ominous demise not so long ago, especially compared to Progressive).

Unaudited numbers for 2023, Geico 90.7%, Progressive 94.9%.

[treasurehunt]

2 hours ago, Cigarbutt said:

Unaudited numbers for 2023, Geico 90.7%, Progressive 94.9%.

 

Also, premiums earned for 2023: Geico - 39,264 & Progressive - 58,664.

 

Stunning, considering that premiums earned were pretty even as recently as 2019.

[gfp]

2 hours ago, treasurehunt said:

 

Also, premiums earned for 2023: Geico - 39,264 & Progressive - 58,664.

 

Stunning, considering that premiums earned were pretty even as recently as 2019.

 

It's been great - at $40-50 Billion market cap Progressive was one of those companies you could have held an auction on a desert island and made money.  At $110 Billion I'm not so sure but these folks are very good at what they do.

 

[longterminvestor]

Been saying it for a while.  GEICO is getting SMOKED by Progressive.  Its not even close.  

[ValueArb]

On 3/1/2024 at 5:23 PM, longterminvestor said:

Been saying it for a while.  GEICO is getting SMOKED by Progressive.  Its not even close.  

 

I am an almost four decade USAA member so never really paid much attention to my auto insurance rates. Maybe 10 or 15 years ago I checked out GEICO and it wasn't close, so I have always assumed USAA was cheapest I could ever get.

 

Then last month I had to add my 19 year old daughter to my policy. She got her license a year ago but doesn't have a car and only drives my car with me coaching her to maintain/build her skills, and she's never got a ticket or had an accident. But I added her because I am about to buy her a car, and want her to be covered if she drives my car without me.

 

$3,000 per 6 months, nearly triple.

 

So what are you going to do? Young drivers are expensive and I full well know she's not a great driver yet. But I chafed at paying $500/month in insurance for a car costing me $500/month in payments, so I decided to checkout alternatives, the first was Progressive.

 

$1,100 per 6 months. 

 

I was excited enough I immediately signed up with them and canceled USAA. But then curious, I checked out GEICO. Its rates appear to be slightly cheaper. Not enough for me to undo my switch to progressive but both should be eating USAA's lunch.

 

I have no idea what happened to USAA. 5-10 years ago their service was still outstanding, today I'm stuck on hold for long periods to deal with bogus credit card charges every single month, then they cancel my cards and slow boat me replacements that take over a week. They could have charged me double Progressive/GEICO and I never would have even shopped.

[gfp]

I've had basically all my insurance with USAA for 29 years.  Like you, I never shop my auto rates.  We adopted a 15 year old in 2015 and I didn't want to mess up my USAA stuff so I insured his Honda Fit with GEICO, separate from all our other vehicles.  Predictably he caused a crash at 16 or 17 years old.  He didn't touch anybody, but other cars crashed into each other because he drove poorly.  He stayed on the scene and took the blame and one or more of the other drivers sued GEICO for the standard Louisiana shakedown - my neck hurts, my back isn't right, I can't work, etc..  I have no idea what GEICO even paid them because I cancelled the policy and sold the Honda Fit after the accident (he made a number of mistakes later that evening so car privileges were revoked).  USAA never seemed to know that any of it happened and we never let him drive our vehicles other than that Honda Fit, which was technically mine.

 

I don't do any banking or CC stuff with USAA but I've still been able to get right through to a person in Texas for all of my insurance calls.  Just this morning I called in for Flood, which goes through USAA Agency since its just FEMA federal flood insurance and I was still put right through to a person and she handled the change in like 30 seconds and I was done.

 

We were sued by a former tenant who slipped and fell on deck stairs in a rain storm.  All on video.  USAA was great throughout that whole process.  They actually lowered our premiums on that 5-plex because they didn't know we had cameras previously.

 

USAA was also way better than any other insurance carrier I heard about after hurricane Ida hit New Orleans.  They didn't mess around or be adversarial and paid us a huge sum for roof damage that cost a lot more than usual because of 108 solar panels in the way.

 

I like them still.  (I didn't serve but my late Father was in the Air Force and I've had USAA since my learners permit) 

[John Hjorth]

Posted by Charlie [ @dealraker ] in the 'Berkshire/Buffett - General News' topic today, related to Semper Augustus and Chris Bloomstran  separately from Berkshire, thus by copying and pasting grabbed and continued here :

 

Link to Charlies post.

 

Quote

... Of recent it was none other than Bloomstran - actually Semper - who co-led a mass of frantic obsession/buying with DG that's turned bad, really bad.  My guess though is that Bloomstran had absolutely nothing to do with it all.  He's too busy out-and-about selling.  It's working, assets under management growing nicely.  Won't last. ...

 

Based on that, I looked at Dataroma :

 

 

That does not exactly look like fun, being ~38% down from EOP 2024H1 to to date on a at then ~10 % position in this general market.

 

'We can't win them all' and 'There are no called strikes in this game' and all that. 'Itch to act' [as alternative to 'just' being promotional]?

[charlieruane]

The guy just never sits still - look at the "Activity" tab on his Dataroma profile. Admittedly not *massive* turnover in terms of % of assets per quarter, but so many tiny, meaningless trims and adds that suggest a lack of discipline. 

 

Compare Bloomstran's activity with Guy Spier's—love him or hate him, Spier at least knows the value of sitting still. 

Edited September 6 by charlieruane

[John Hjorth]

1 hour ago, charlieruane said:

... Compare Bloomstran's activity with Guy Spier's—love him or hate him, Spier at least knows the value of sitting still. 

 

I'll give you that, @charlieruane,

 

it appears true.

 

However Mr. Spier is also - like Mr. Bloomstran - one of those money managers, who charge fees against limited partners for doing nothing with a material position in Berkshire, in stead of politely asking those limited partners buying Berkshire  directly themselves for own personal account for their personal very best [EOP 2024H1 : ~29 %, USD 75.563 M]. [It's to me so unbelieable [and material] easy money, that it should not be considered a service of value at all].

 

I have a hard time understanding somebody may be so dumb with material sums of capital without even thinking about it, but that may just be me.

 

Anyway, it does not dress Mr. Bloomstran, nor Mr. Spier, well, despite each to their own, and that none of us are set on this this planet to solve all its problems.

Edited September 6 by John Hjorth
Fixed digit separator to US practice, [',' -> '.']

[charlieruane]

Agreed—I lump Spier and Bloomstram (and, especially, Pabrai) in the same camp overall. I just wanted to at least give Spier credit for sitting tight. 

[John Hjorth]

4 minutes ago, charlieruane said:

Agreed—I lump Spier and Bloomstram (and, especially, Pabrai) in the same camp overall. I just wanted to at least give Spier credit for sitting tight. 

 

Hereby personally bought at par  .

[John Hjorth]

1 hour ago, charlieruane said:

Agreed—I lump Spier and Bloomstram (and, especially, Pabrai) in the same camp overall. I just wanted to at least give Spier credit for sitting tight. 

 

Yeah, @charlieruane ,

 

For my part, Monish Pabrai is in his very own separate and individiual leage here, but for me based on personal and subjective evaluations and assessments about his motives and actions about and why he is doing what.

 

He has been giving up basically about everything he earns - and have done so for many years now, by giving it to Dakshana Foundation. And I would say say, with tremendous success, simply keep the ball rolling and creating opportunities for young people with a technical background, who want to proceed and succeed in life.

 

He is simply the catalyst to make good things happpen, for other people than himself, which is amazing.

 

Nobody can paint a picture to something similar about Mr. Bloomstran or Mr. Spier, compared to Mr. Paprai's doings so far.

[Luke]

9 hours ago, John Hjorth said:

in stead of politely asking those limited partners buying Berkshire  directly themselves for own personal account for their personal very best [EOP 2024H1 : ~29 %, USD 75.563 M]. [It's to me so unbelieable [and material] easy money, that it should not be considered a service of value at all].

 

I have a hard time understanding somebody may be so dumb with material sums of capital without even thinking about it, but that may just be me.

Its not only BRK but also Exor, PRX, even Nestle. You don't need to be a genius to hold them and make money longterm...quite pathetic considering they market themselves as genius investors. Never would send them 1ct.