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What are you buying today?


LowIQinvestor

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Not sure why so many people are buying brk.b - at this point brk is an S&P hugger and they both have the same 1 and 5 year returns. Plus, there's probably downside if WB kicks it.

 

Sure downside short term in WB, upside if you believe one is undervalued and one isn't. Plus 1 and 5 year is backward looking. The cash on hand as % of mkt cap for brk is multiples of cash for s and p. Rates are going up. IMO, faaanggsss or whatever it is now won't grow next five nearly as fast as last five, which by itself seriously changes the equation if true.

 

I bought a small position in brk yesterday.

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Not sure why so many people are buying brk.b - at this point brk is an S&P hugger and they both have the same 1 and 5 year returns. Plus, there's probably downside if WB kicks it.

 

S&P returns for last 5 years are higher than long running average. Berkshire returns are lower than longer running avg.

 

I am buying Berkshire as I believe there is less downside. Actually with more than $100 BN of cash, things turn favorable for Berkshire with every downturn or even in increasing volatility. This enables Berkshire to pick up common stocks or whole companies. Berkshire is very likely to double over next 7-9 years. Can’t say same about S&P.

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Large position (for me) in Ashford Inc. last few days. Good writeup by Scott Miller@Greenhaven Road but price much more attractive now, and they announced a major deal yesterday (somewhat expected but confirms thesis).

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I added a little more PPR.TO.

 

I’m not sure how sustainable these oil prices are but I’m calculating about $0.12 in cash flow for Q3 (before the impact of FX and hedges). Annualized, that’s about $0.48 vs the current share price of $0.36. They have been guiding to end the year with debt of around $0.50 but that should be lower if these prices persist.

 

Is that cheap enough for anyone to care? That part is not clear!

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Not sure why so many people are buying brk.b - at this point brk is an S&P hugger and they both have the same 1 and 5 year returns. Plus, there's probably downside if WB kicks it.

Added brk-b to 18% of portfolio. Reason is the same of the previous post. Downside protection and decent upside prospects. See it as safer than the s&p. i can't imagine brk at 93 but can imagine the s&p dropping 50%. Similarly, I can see brk earning 9-10% long term but can't imagine the same for the s&p.

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Wrote BRKB 187.5-strike July 6 expiration puts for $1.05 per share to replace those expiring today.

 

Wrote a bunch of USB 50-strike July 13 expiration puts for $0.55 per share to replace those expiring today.

 

Wrote some WFC 55-strike July 13 expiration puts for $0.65 per share. Again to replace some expiring today.

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Wrote BRKB 187.5-strike July 6 expiration puts for $1.05 per share to replace those expiring today.

 

Wrote a bunch of USB 50-strike July 13 expiration puts for $0.55 per share to replace those expiring today.

 

Wrote some WFC 55-strike July 13 expiration puts for $0.65 per share. Again to replace some expiring today.

 

Looking at an old thread, writing short term puts with BRK below 1.4 BV seems to be a continuing strategy for you, no?  Looks as if that gets you either BRK on the cheap or a ~18% return on marginable portfolio.  (Nice)

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Wrote BRKB 187.5-strike July 6 expiration puts for $1.05 per share to replace those expiring today.

 

Wrote a bunch of USB 50-strike July 13 expiration puts for $0.55 per share to replace those expiring today.

 

Wrote some WFC 55-strike July 13 expiration puts for $0.65 per share. Again to replace some expiring today.

 

Looking at an old thread, writing short term puts with BRK below 1.4 BV seems to be a continuing strategy for you, no?  Looks as if that gets you either BRK on the cheap or a ~18% return on marginable portfolio.  (Nice)

 

Yes I have been doing that with BRK for more than 10 years, ever since there have been B shares. It is how I accumulate BRK shares and also do some trading.

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I bought some EFR.DB-TSX yesterday.

 

It’s a pretty interesting piece of paper to have access to a potential Uranium bull market while getting paid to wait. Maturity is Dec 2020, strike is C$4.15. Implied vol of the outstanding warrants is over 60% while the debs trade at par.

 

The debt issue is also a small part of the capital structure and I don’t think they will have a problem raising money but of course I think the debs could be a multibagger.

 

I added some EFR.DB. In the last month (June 4), the common (EFR) is up 22%, the warrants (EFR.WT) are up 33% and the convertible bonds (EFR.DB) are basically flat. Has the bond's value diminished so much in the past month or is the conversion option underpriced. I'm betting on the latter.

 

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Added to INDU C.STO [industrivärden AB, ser. C] today. [Company Website]

At about 1 year lows, relatively weak SEK compared to DKK [sEK has no peg to EUR], most likely the stock is down on the global tariff stuff going on.

 

Industrieländern looks good to me -~20% discount to NAV and beats the index over the long run.

 

I'll try to do it short, not to clog up this topic. It's Fredrik Lundberg's second layer Pinocchio. [First layer Pinocchio is L E Lundbergföretagen AB.] In short, Industrivärden is a large chunk of to me the best bank in Scandinavia : Svenska Handelsbanken AB, combined with being major/anchor investor in basket of - on overall basis - fairly good Swedish industrial companies with an international footprint and a total turnover in this basket of about SEK 1,000 B, by the use of now quite moderate leverage. Study the taxes in note 8 and on p. 51 i the 2017 financials! This one has no built in money printing machines [wholly owned subs], while L E Lundbergföretagen AB has two: Two enormous real estate portfolios [with no debt] in respective  Fastighets AB Lundberg [100% owned] and Huvudstaden AB [controlled sub], where the dividends don't get taxed, like in Industrivärden AB. The shareholder structure is worth to study, too. I would argue, that Fredrik Lundberg in reality controls the company, in cooperation with pension funds and foundations around Svenska Handelsbanken and other investees etc.

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GS - i know the backdrop of stress tests etc doesn’t look good but it’s at ~1.1 times book. Their lending platform seem to be doing well. I consider this and WFC a good place to wait till the yield curve steepens

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