gfp Posted January 25 Share Posted January 25 (edited) 1 hour ago, ValueArb said: TTM earnings are a third of the peak. What are you talking about? https://www.macrotrends.net/stocks/charts/AAPL/apple/net-income And Revenues up 20% total over 9 years? Haven't they doubled? (while over 1/3 of shares retired) https://www.macrotrends.net/stocks/charts/AAPL/apple/revenue No wonder you guys think it's such a dog. Just remember that this company has returned $600 Billion in excess capital it generated and didn't need in its business in the last 6 years that Buffett has owned it. $600 Billion out the door and the market says what's left is worth $3T. Edited January 26 by gfp Link to comment Share on other sites More sharing options...
Hektor Posted January 26 Share Posted January 26 58 minutes ago, Munger_Disciple said: Actually Buffett (a.k.a. the ) used an overvalued book (due to Coke) and an overvalued stock price (> 2X book) to buy GenRe in 1998 in an all stock transaction. In other words, he exchanged a significant portion of an over-valued stock portfolio of Berkshire for an undervalued bond portfolio of GenRe in a tax efficient manner w/o incurring any capital gains taxes. Not to mention the acquisition of Dexter using Berkshire shares and the issuance of Berkshire B shares. Should we look at all these as a proxy for monetizing Coke (and others) without friction? Link to comment Share on other sites More sharing options...
gfp Posted January 26 Share Posted January 26 I wonder how many people both purchase TIPS and criticize Buffett for holding his Coke shares - sure that he is missing something they get. (60 plus years of increases, .03 -> $1.84/sh during Berkshire's holding period) Link to comment Share on other sites More sharing options...
Gregmal Posted January 26 Share Posted January 26 Yea a lot of the stuff we see people do makes no sense. Sitting on a bond yielding 5% is like paying 20x for a business with no growth and no inflation protection. It’s probably even worse. But people do it and then think Apple is expensive even though it’s got modest growth and inflation protection. Not saying I’m a buyer of Apple here, and I still wouldn’t even get out of bed for 5%, but the logic is head scratching. On Berkshire, it’s an index substitute with a few caveats. You don’t buy it to sit around spending all this time thinking about it. You buy it so you don’t have to check your stock quotes every month. Link to comment Share on other sites More sharing options...
hasilp89 Posted January 26 Share Posted January 26 1 hour ago, gfp said: I wonder how many people both purchase TIPS and criticize Buffett for holding his Coke shares - sure that he is missing something they get. (60 plus years of increases, .03 -> $1.84/sh during Berkshire's holding period) lol. Link to comment Share on other sites More sharing options...
thepupil Posted January 26 Share Posted January 26 3 hours ago, gfp said: I wonder how many people both purchase TIPS and criticize Buffett for holding his Coke shares - sure that he is missing something they get. (60 plus years of increases, .03 -> $1.84/sh during Berkshire's holding period) not sure I get your point. LT TIPS destroyed KO from when it was expensive, as did normal bonds and other types of stocks. from 01/1999 - 12/31/2007 (so not including the GFC), LT TIPS made 110% / 8.6%/yr and KO made 10% / 1% / yr. (I'd love to provide a less cherrypicked atart point but am constrained by the index for which i have data) KO has been a spectacular investment for Berkshire. It was a shitty investment in 1999. Buffett sold it via issuance of Berkshire stock toward the top, hasreaped lots of divvies and probably, with benefit of hindsight, should have sold the stock too. I don; 2 hours ago, Gregmal said: Yea a lot of the stuff we see people do makes no sense. Sitting on a bond yielding 5% is like paying 20x for a business with no growth and no inflation protection. It’s probably even worse. But people do it and then think Apple is expensive even though it’s got modest growth and inflation protection. Not saying I’m a buyer of Apple here, and I still wouldn’t even get out of bed for 5%, but the logic is head scratching. On Berkshire, it’s an index substitute with a few caveats. You don’t buy it to sit around spending all this time thinking about it. You buy it so you don’t have to check your stock quotes every month. when does my apple stock mature? Link to comment Share on other sites More sharing options...
John Hjorth Posted January 26 Share Posted January 26 (edited) Short version of post : Please stay on topic, or leave and go home. Quote A thread for things which are interesting but which don’t warrant their own thread. Might even produce actionable ideas. - - - o 0 o - - - Long version of post : Contained, as the first lines in the first and topic starting post in this very topic by topic starter @Sweet : Quote A thread for things which are interesting but which don’t warrant their own thread. Might even produce actionable ideas. The question of "Should Berkshire reduce its large position in Apple?" is alreday well covered, I'm confident, in the Berkshire forum / section here on CoBF. If you invest in a not only Berkshire, but actually any conglomate, and if your capital outlay is not material enough for you to seek influence, in all other situations you're wasting your time thinking about it and discussing it with others, because the terms and conditions of the investment are that you're not buying a ideal part of the privilege and rights to swing a in golf simulator. The above is actually conglomerate investing 101. It applies to discussing capital allocation, concentration and how to deal with laggards in conglomerates. Perhaps, You can make proposals at shareholder meetings / EGMs or AMGs according to the bylaws of the holding company, if you have such rights, and you may vote, if your shares are bearers of voting rights. Beside shorting Apple, the line of thinking is not actionable. Please look up posts about shorting Apple by Greg [ @Gregmal ] here on CoBF. I think the above is also why some conglomerates historically till now have been very successful, some for more than a century. Non-fitting, perhaps illiterate shareholders to the terms and conditions [crowd shareholders] have long ago been weeded out for the most of them so there are no clashes and everybody agree on the terms and conditions. - - - o 0 o - - - If the post is about valuation of Apple, it should naturally go into the AAPL topic in the Investment Ideas forum. - - - o 0 o - - - Unfortunately this topic has evolved into a dystopic mess of off-topic posts belonging somewhere else here on CoBF, all while some posts seem to contain real valuable thinking and considerations worth discussing here on CobF in further details and shades, - exactly just not here, where it's fate is to pass away by away by drowning. In a beauty contest I think this topic isen't even in the same leauge as limp and humpbacked Quasimodo because of the above. - - - o 0 o - - - Please stay on topic according to @Sweets good intentions with this topic in the first place. Edited January 26 by John Hjorth Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 26 Share Posted January 26 6 hours ago, ValueArb said: And it was a disaster. Just another in a long line of examples that the intrinsic value of the investment matters far more than clever deal benefits. GenRe had problems and they cost Berkshire money and focus in the 2000-2004 time period, yes. But they were fixed by Joe Brandon and it has been a good business since. Hardly a disaster IMO. You make it sound like the AOL-Time Warner deal, or Altria-Juul deal. Anyway if you disappointed with Berkshire, it is very easy to exit. Link to comment Share on other sites More sharing options...
Sweet Posted January 26 Author Share Posted January 26 2 hours ago, John Hjorth said: Please stay on topic according to @Sweets good intentions with this topic in the first place. I’m ok with people posting what they want. If there are a few pages of talking about Apple and Berkshire that’s ok. It’s just people working through investment ideas which I think is entirely part of what this thread was supposed to be. Link to comment Share on other sites More sharing options...
Dinar Posted January 26 Share Posted January 26 8 hours ago, Munger_Disciple said: GenRe had problems and they cost Berkshire money and focus in the 2000-2004 time period, yes. But they were fixed by Joe Brandon and it has been a good business since. Hardly a disaster IMO. You make it sound like the AOL-Time Warner deal, or Altria-Juul deal. Anyway if you disappointed with Berkshire, it is very easy to exit. In my opinion, the purchase of Gen Re by Buffett was brilliant. Link to comment Share on other sites More sharing options...
ValueArb Posted January 26 Share Posted January 26 14 hours ago, gfp said: What are you talking about? https://www.macrotrends.net/stocks/charts/AAPL/apple/net-income And Revenues up 20% total over 9 years? Haven't they doubled? (while over 1/3 of shares retired) https://www.macrotrends.net/stocks/charts/AAPL/apple/revenue No wonder you guys think it's such a dog. Just remember that this company has returned $600 Billion in excess capital it generated and didn't need in its business in the last 6 years that Buffett has owned it. $600 Billion out the door and the market says what's left is worth $3T. I'm not going to argue with you if you are going to use the actual facts while I was reading off the wrong ticker. Thats just mean, man! Link to comment Share on other sites More sharing options...
ValueArb Posted January 26 Share Posted January 26 8 hours ago, Munger_Disciple said: GenRe had problems and they cost Berkshire money and focus in the 2000-2004 time period, yes. But they were fixed by Joe Brandon and it has been a good business since. Hardly a disaster IMO. You make it sound like the AOL-Time Warner deal, or Altria-Juul deal. Anyway if you disappointed with Berkshire, it is very easy to exit. I sold a few years ago when I got back to active investing. And I'm not "disappointed" with Berkshire or Buffett. Just pointing out that he has some innate biases that cost some returns. I still think he's as skilled as ever, but he's carrying such a heavy ball and chain on his returns with such an enormous portfolio that I don't expect him to beat the S&P 500 by more than a few points a year anymore. If Buffett was greedy and did everything to maximize his own net worth, he never would have given up his 25% profit share, never would have given any shares to charity, would have bought shares back aggressively in early 2000s, never traded shares in acquisitions like Gen Re, and would have sold bad subsidiaries or been quicker to shut them down. All combined he'd be working a much smaller portfolio generating significantly higher returns, and that smaller portfolio likely would have helped him avoid mistakes like Kraft and Precision Castparts. Greedy Buffett could have easily achieved a net worth somewhere north of $400B. But Buffett isn't greedy. He loves playing a game he's best in the world at, in a large part because it benefits his partners and shareholders equal to himself. He likes building a great company that puts ethical behavior above trying to squeeze every penny out of its workers and subsidiaries. And amassing the greatest net worth isn't his goal, just the tool he wants to use to provide the greatest possible benefits to worthy causes. But I'm greedy, so I bark at his ankles occasionally then run back to my couch. Link to comment Share on other sites More sharing options...
adesigar Posted January 26 Share Posted January 26 KO did not perform great since 2000 but it didn’t do as badly as some people think. I think it’s about 6-7% per year total return with dividend reinvested. Not great but not as terrible as just looking at the chart would suggest. Link to comment Share on other sites More sharing options...
thepupil Posted January 26 Share Posted January 26 (edited) From it's absolute cherry picked 1998 peak, KO has returned 4%/yr, roughly what the bond index has returned. from same date SPX did 3.5% / yr better and 3.4x cumulatively what the KO returned. KO lagged significantly and substantially following its glorious rating upwards and generated a poor absolute return. Less cherrypicked data below. Let's be clear, the stock made 30% a freaking year in the 10 years ended 1999 in a market that did a steamy 18%/yr. It's been an absolutely fantastic pick, and I'd argue buffett did monetize it (issuing stock) and never reinvested dividends. He doesn't monetize via selling stock. On balance that's been a very good way of managing berkshire's portfolio and made him and his shareholders rich. doesn't mean there aren't potential drawbacks to #neversell Edited January 26 by thepupil Link to comment Share on other sites More sharing options...
Masterofnone Posted January 26 Share Posted January 26 Not to continue to flog this discussion, but the point of owning Berkshire is risk adjusted return. Sure there are ways to make money faster. If someone insists I steer them into a stock my only response is Berkshire- moral hazard and all... There have been so few downdrafts in recent stock market history that folks tend to discount the value of safety and the potential of benefiting from "bad" times. BRK's portfolio is not optimized for total return but for risk adjusted return. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 26 Share Posted January 26 6 hours ago, Dinar said: In my opinion, the purchase of Gen Re by Buffett was brilliant. I am happy with the way GenRe worked out. It was a brilliant deal (Buffett swapped a totally overvalued Berkshire stock for incredibly undervalued GenRe bond portfolio w/o cap gains) but Buffett didn't foresee the deterioration in GenRe underwriting standards prior to the purchase. Joe Brandon took over as CEO and fixed the problems by 2005. Overall it worked out just fine. Link to comment Share on other sites More sharing options...
DooDiligence Posted January 27 Share Posted January 27 10 hours ago, ValueArb said: I'm not going to argue with you if you are going to use the actual facts while I was reading off the wrong ticker. Thats just mean, man! This is why I come here. Link to comment Share on other sites More sharing options...
Sweet Posted January 27 Author Share Posted January 27 Land is something I’ve wanted to own. That’s significantly cheaper than land in the UK- about 4x cheaper by my estimates. Something I would seriously consider if I lived stateside. Link to comment Share on other sites More sharing options...
John Hjorth Posted January 27 Share Posted January 27 (edited) @Sweets last post just inspired me to this tidbit : From Swedish Holmen AB website [Holmen AB is a forestry company and one the largest landowners in Sweden : A free book! [Like in really free! - Not 'Please subscribe to news from us / follow us on X or FB, and we will send you your copy of the book' / 'for our shareholders']: https://www.holmen.com/en/paper/products/book-paper/book/ I ordered the book back in december, nosy as I am, because I'm a shareholder indirectly via L.E. Lundbergföretagen AB, while Holmen AB is also separately listed. - - - o 0 o - - - I've never in life seen a company profile brochure in the form of a 125 pages high quality paperback explaining in depth how the compay is doing business and its business model vith modus operandi. A company, where planning involves decades in short term planning and long term planning is about centuries. At the same time the book is a product sample of one the companys products [paper]. A business where all inventory items are slow moving items! If you're good at planning, you'll never have to scrap anything - in stead you just let it be on its roots to another day when the demand is there, and in the meantime it just stands there and becomes more [grows] without futher outlay / cogs going up! Newest business leg : Slap wind turbines in clearings in low quality forestry land, there are no neighbour complaints in the planning stage, but perhaps the towers may need a little extra height! I really can't imagine this company not being here and not staying for many years, because the worlds population growth and foresty products is an input factor to housing, and likely a good inflation hedge, too. But it's already controlled by a parent, who understands and appreciate its long term properties. Edited January 27 by John Hjorth Link to comment Share on other sites More sharing options...
gfp Posted January 27 Share Posted January 27 (edited) I don't know about land / farm prices being "cheap" in America. We have a family farm in Indiana (USA) and my Uncle is currently managing it. He told me a "medium quality farm in Indiana near our farm sold for $13,400 / acre recently." Now that price doesn't make sense to me for raw farmland at all. I see the financials, I know what the farm produces on average over time. There is tax. It just doesn't seem undervalued to me at all. Maybe somewhere else there is productive ag land that is much cheaper but $13,400/acre for Indiana farmland is just strange. I think @boilermaker75 has a similar farm in his family. Maybe he can chime in and tell me $13k is way off the mark and my uncle is smoking crack. Edited January 27 by gfp Link to comment Share on other sites More sharing options...
Spekulatius Posted January 27 Share Posted January 27 @John Hjorth Spirax Sarco - a great Uk company has the same thing , you can get a free hard copy of a book about their history. I ordered it and got it a bit later. It’s a great company too, but fully valued. https://www.spiraxsarcoengineering.com/about-us/our-history Link to comment Share on other sites More sharing options...
Spekulatius Posted January 27 Share Posted January 27 1 hour ago, gfp said: I don't know about land / farm prices being "cheap" in America. We have a family farm in Indiana (USA) and my Uncle is currently managing it. He told me a "medium quality farm in Indiana near our farm sold for $13,400 / acre recently." Now that price doesn't make sense to me for raw farmland at all. I see the financials, I know what the farm produces on average over time. There is tax. It just doesn't seem undervalued to me at all. Maybe somewhere else there is productive ag land that is much cheaper but $13,400/acre for Indiana farmland is just strange. I think @boilermaker75 has a similar farm in his family. Maybe he can chime in and tell me $13k is way off the mark and my uncle is smoking crack. If you don’t mind a grab bag of assets, buy QUCT. You get 25k of farmland ( the result of a 19th century Mexican land grant) in near coastal central California for basically free. I am not sure it ever gets monetized though. Link to comment Share on other sites More sharing options...
Saluki Posted February 9 Share Posted February 9 Mojo Nixon died https://www.nytimes.com/2024/02/08/arts/music/mojo-nixon-dead.html I'm a big Elvis fan. And one of my favorite songs is "Elvis is Everywhere" by Mojo Nixon. I don't think he ever got the recognition like Weird Al Yankovic because, unlike Weird Al, people couldn't tell if he was kidding or just a crazy hillbilly singing weird songs about having a Bigfoot baby with Debbie Gibson or killing Don Henley. He didn't take himself, or anyone else too seriously and he reminds me of that Munger Quote about Musk and Trump that you shouldn't underestimate someone who overestimates himself. From the Washington Post obit: As Mr. Nixon told it, he was “not that talented” but instead had “an enormous, irrational amount of confidence.” Link to comment Share on other sites More sharing options...
Spekulatius Posted February 17 Share Posted February 17 On 1/17/2024 at 7:33 AM, Spekulatius said: The cars were always financed with debt, but what really surprised me when I looked at both Hertz and Avis balance sheet that they added some corporate unsecured debt at the company level. So these business are a really a pile of unsecured debt on top of a huge pile of secured debt with a sliver of equity. The stocks seem very much like options themselves. Great if it works, but a zero if it doesn’t. $CAR down from ~$170 to $113 since discussed here. Weak operating results and a ton of leverage do this. I think 2024 results are going to be way down, it seems. Link to comment Share on other sites More sharing options...
mjm Posted February 17 Share Posted February 17 1 hour ago, Spekulatius said: $CAR down from ~$170 to $113 since discussed here. Weak operating results and a ton of leverage do this. I think 2024 results are going to be way down, it seems. what do you base that on? poor economy? curious? Link to comment Share on other sites More sharing options...
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