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Cracks appearing in Muni Market


ubuy2wron
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I am a complete neophyte when it comes to the US Muni mkt. I sat for US registration exams 30 years ago  but promptly forgot everything I learned on tax exempts as my career was to be  spent in Canada. Prem has made some largish "bets" re the muni-mkt I believe which I am very confident will turn out to be the correct ones long term , however Mr Mkt.  in his infinite wisdom seems to care little for long term outcomes when there are short term issues to fret over. Is FFH exposure enough to for me to worry what others may be worrying about.

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2/3 of their muni bonds are insured by Berkshire Hathaway.  

 

We should be okay with the remaining 1/3 and if I remember correctly, Prem was saying they only bought the muni bonds of essential services such as public water works and such...  Prem and his team performed due dilligence on the muni's so with a high level of certainty I am confident we should not worry too much about them. 

 

Thanks,

 

S

 

I am a complete neophyte when it comes to the US Muni mkt. I sat for US registration exams 30 years ago  but promptly forgot everything I learned on tax exempts as my career was to be  spent in Canada. Prem has made some largish "bets" re the muni-mkt I believe which I am very confident will turn out to be the correct ones long term , however Mr Mkt.  in his infinite wisdom seems to care little for long term outcomes when there are short term issues to fret over. Is FFH exposure enough to for me to worry what others may be worrying about.

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2/3 of their muni bonds are insured by Berkshire Hathaway.  

 

We should be okay with the remaining 1/3 and if I remember correctly, Prem was saying they only bought the muni bonds of essential services such as public water works and such...  Prem and his team performed due dilligence on the muni's so with a high level of certainty I am confident we should not worry too much about them.  

 

Thanks,

 

S

 

I am a complete neophyte when it comes to the US Muni mkt. I sat for US registration exams 30 years ago  but promptly forgot everything I learned on tax exempts as my career was to be  spent in Canada. Prem has made some largish "bets" re the muni-mkt I believe which I am very confident will turn out to be the correct ones long term , however Mr Mkt.  in his infinite wisdom seems to care little for long term outcomes when there are short term issues to fret over. Is FFH exposure enough to for me to worry what others may be worrying about.

 

 

The type of munis FFH bought have a default rate that is closer to zero than to 1%.  They are far better long term holds at the prices FFH paid than US Treasuries of comparable duration that are priced at bubble values.  However, their market prices will fluctuate as Mr. Market has his moods.  :)

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