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Went to cash


twacowfca
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Guest Bronco

I may be most cash soon.  Buying opportunities will be everywhere.

 

Even stocks I hate like MSFT will be tempting.  Google is gonna be a buy (probably is now). 

 

May buy some puts on Aflac.  We'll see.  Fairfax may clean up on this.  Anyone got a back of an envelope to see how much they could make on a 1000 point drop from the recent top?

 

Will Buffett buy again? 

 

Interesting times these days - unfortunately it is all based on tragedy.  I don't remember this much crap growing up.  This Japan event is worse than 9/11, and that was horrific.

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Last Friday with completion Monday ...

 

twa, what does fri/completion monday mean? it sounds technical, as in TA, charts, moving avg crossovers etc

 

and besides, i thought you gave alot of weight to movement in the monetary base in your investment decisions, which has been in an uptrend....just curious. i paired about 10% of my holdings recently & have about 30% in cash but that was strictly a valuation call. nothing fancy.

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Anyone got a back of an envelope to see how much they could make on a 1000 point drop from the recent top?

 

 

 

with a stock portfolio thats basically 100% hedged i doubt they'll make much there except maybe a few percentage alpha points annually over time. i'd be watching their bond investments. dont know how their cpi derivatives will pan out.

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Anyone got a back of an envelope to see how much they could make on a 1000 point drop from the recent top?

 

 

 

with a stock portfolio thats basically 100% hedged i doubt they'll make much there except maybe a few percentage alpha points annually over time. i'd be watching their bond investments. dont know how their cpi derivatives will pan out.

They'll prob sell some hedges in the height of fear and hold onto and add to equities?

Maybe corp bonds as well. Look at the income stream rising.

Costs are usually the easiest ways to add to pos cash flow (addition by subtraction) unfortunately not THAT easy in the insurance world when it comes to the variables that affect CRs.

 

EDIT: Forgot to mention CDS - I believe they should be soaring, just cant remember if or to what extent FFH holds here.

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Guest Bronco

I wrote covered calls on most of my Loews after earnings and they expire Friday.  We'll see.

 

Amazed the holder of the calls is watching them go worthless.  Unreal.

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Well, to paraphrase someone, it's not that I like panic (frankly, this nuclear reactor problem show once again how this kind of energy can be potentially very damaging), but I like the prices it provide.

 

MSFT, JNJ and WMT are good examples of that.

 

I don't have any single idea how the stock market will goes over the next months/year, but I do like some prices that we're having now.

 

Cheers!

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I dont want to get into reactors pros and cons (and I am no kind of expert, just a layman) but i do know, or am aware that not all Nuclear plants have the same cooling methods. I believe those we have here in Ontario would not be affected the same way as those in Japan because of the cooling methods.

 

Its unfortunate but truley what the plants provide vs the dangers when comparing them in sum to other methods of power creation is minimal - and Im not saying these deaths are minimal - just mean there are deaths from other methods as power generation as well.

 

 

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Last Friday with completion Monday went to cash on all but our core holding.

 

I wish I had your balls. Had similar thoughts, but at this point. I will suffer through. We will both come out of this ok, but you will have a better batting average.

 

Congrats.

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Going to cash at the same time as everyone else makes keeping a good batting average tough over time.

 

He beat them by a day or so  ;D. It was a wise move, I think we are in for a rough week, and frankly its warranted. This is a big deal.

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Last Friday with completion Monday ...

 

twa, what does fri/completion monday mean? it sounds technical, as in TA, charts, moving avg crossovers etc

 

and besides, i thought you gave alot of weight to movement in the monetary base in your investment decisions, which has been in an uptrend....just curious. i paired about 10% of my holdings recently & have about 30% in cash but that was strictly a valuation call. nothing fancy.

 

Sorry for the confusion.  We sold about 80% of our non core holdings Friday and the remainder Monday.

 

We do give a lot of weight to change in the money supply.  But when there is fire in a theater, customers don't even think about whether it's raining or sunny outside when they head for the exits.  

 

This could merely be a market adjustment, but if enough people think the sky is falling, it can be a self fulfilling prophesy.  With lots of cash, the only downside is a little missed opportunity cost if the markets make a quick rebound.

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Anyone got a back of an envelope to see how much they could make on a 1000 point drop from the recent top?

 

Will Buffett buy again? 

 

Who knows, I'll probably be buying Buffett tho. :)

 

About FFH : It is a hedge so don't expect much. With a decent correction they can make a lot of unrealised losses undone, which could give a decent boost to BV but that's it. At this price it's a bargain for the long run but with a possible correction at hand FFH may slide down aswell. I would love to see FFH at 0,80xBV and a market down -5 or -10% from here but I am afraid Mr Market isn't that dumb...

 

Remember WEB: "be fearful when others are greedy; be greedy when others are fearful."

 

Personally I see lots of good businesses that are much cheaper now than they were a week ago...

 

I think we all see al lot of good businesses trading cheaper than last week, doesn't necessarily mean they are opportunities too.

 

Give it some time. We just had a 6 month run with the broader market rallying 20%+, given the circumstances I believe we have enough possible downside left for the next couple of days/weeks. On the other hand I see a lot of people expecting a decent correction soon, I am not sure what to think of that...

 

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Still Lancashire, right?  Are you at all concerned about the bonds they are holding?

 

Thx

 

Nope.  They hold very high quality US assets with a short average duration.  :)

 

What do you think about their exposure to claims from Japan? I saw some numbers (250 million tops for a 2010 Japan earthquake) but can't really make much of it because I believe that would include some major damage in cities etc. Then again, who knows they hit the jackpot on any of there 4 lines of insurance...I feel like the stock reaction is brutal but it was trading at 1,3x BV and now still at +- 1,10x BV excluding the incoming claims...

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Cash is like a stock. Right now it's cheap so I'm borrowing it, if it was expensive I'd sell it.

 

Remember what Buffett said about leverage:  "If you're smart, you don't need it.  And if you're dumb, you've got no business using it!"  Cheers!

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"If you're smart, you don't need it.  And if you're dumb, you've got no business using it!"

 

Yes, but he use it himself. Insurance, long term debt, etc. Leverage can be a good thing as long as it is small enough to can handle a catastrophe scenario.

 

Cheers!

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No, I think it's because of Buffett double-speak...do as I say, not as I do!  As many people have said, and often these people are lynched for their comments, but Buffett does say certain things and does the opposite.  What should concern Berkshire investors slightly, is the fact that he said that when the credit crisis hit, even Berkshire would have gone down if the government didn't intervene.  It would have been last, but it probably would have gone down also as he stated.  Thus, even Buffett would have been a very smart person who went down because of leverage and dominoes.  Cheers!

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