What are you buying today?

[Shooter MacGavin]

Bought some Hampton DeVille on BNN deal

[John Hjorth]

I bought some Berkshire shares. Munich Re reported good reinsurance profits.

 

Charlie,

 

Berkshire went under the 3 percent threshold on its position in Munich Re on December 16^th 2015, and the stub was likely sold shortly afterwards.

[gfp]

They are both in the reinsurance industry.  I doubt Charlie was buying BRK for any Munich Re look-through.  As you mention, BRK may not own any Munich Re anymore.  BRK's most recent European insurance investment that I can remember was a major stake in Italy's Cattolica insurance group.

 

I bought some Berkshire shares. Munich Re reported good reinsurance profits.

 

Charlie,

 

Berkshire went under the 3 percent threshold on its position in Munich Re on December 16^th 2015, and the stub was likely sold shortly afterwards.

[gfp]

These all expired worthless.  Was able to get as much as $1.10 on Friday, hours before expiry.

 

Channelling my inner Boilermaker and selling a few Feb 8th 2019 expiry 200 strike put contracts on BRK.B for fiddy-cent

 

(cue stock market collapse)

[John Hjorth]

Thanks, gfp,

 

Yes, I may have misinterpreted Charlie's post.

[boilermaker75]

Very nice GFP!

 

These all expired worthless.  Was able to get as much as $1.10 on Friday, hours before expiry.

 

Channelling my inner Boilermaker and selling a few Feb 8th 2019 expiry 200 strike put contracts on BRK.B for fiddy-cent

 

(cue stock market collapse)

[Spekulatius]

WFC is cheap, probably caused by negative press coverage about the outage. I added some on Friday. FWIW, I could still access my accounts, but it was slow.

[Charlie]

John Hjorth,

 

I mentioned Munich Re results as an indicator of Berkshire´s next reinsurance results. The results should be good.  :)

 

 

Cheers!

[John Hjorth]

Thank you for elaborating here, Charlie,

 

-All good!

[Spekulatius]

John Hjorth,

 

I mentioned Munich Re results as an indicator of Berkshire´s next reinsurance results. The results should be good.  :)

 

 

Cheers!

 

The reinsurer AXS and RE don’t look that great, they took quite a hit last quarter. I had positions in both of them and sold out a couple of days ago. I do agree that Münchener Rück‘s result look pretty good. We will see how BRK and FFH are doing. FWIW, I have reduced my FFH Position, but not because of their catastrophe risk, but because of concerns about their investment side.

[boilermaker75]

The other thing that could have happened was you bought more BRKB and there has never been a bad time in my investment career, since 1968, to buy BRKB. And if you already have enough BRKB you could just write covered calls for the next expiration date for about 1% premiums.

 

Very nice GFP!

 

These all expired worthless.  Was able to get as much as $1.10 on Friday, hours before expiry.

 

Channelling my inner Boilermaker and selling a few Feb 8th 2019 expiry 200 strike put contracts on BRK.B for fiddy-cent

 

(cue stock market collapse)

[michaelj]

TAP

[LC]

TAP

 

I did the same.

[Liberty]

TAP

 

I did the same.

 

What attracted you guys to this business? Just curious, I don't know anything about it.

[LC]

What attracted you guys to this business? Just curious, I don't know anything about it.

It's beer  ;D

 

Essentially branded consumer discretionary purchases. They have decent brands (Molson, Coors) and an established distribution network. It's pretty cheap and was 10% off today.

 

While the business may go thru ups-and-downs, especially in terms of management's execution (as we are seeing with other CPG's like Kraft-Heinz), I think product demand will remain relatively more steady (compared to say, Tide detergent).

[DCG]

It still blows my mind that so many people actually drink their shitty beer, with the huge amount great alternatives.

[rb]

Isn't that why brands have value?

[Jurgis]

Isn't that why brands have value?

 

It's surprising that crappy brands have value.  8)

 

 

 

TAP has a bunch of brands that I have not tried, so above is just generic rejoinder.  8)

[spartansaver]

It still blows my mind that so many people actually drink their shitty beer, with the huge amount great alternatives.

 

The recent Bud-light commercials capture my taste on the subject (dilly dilly commercials where they make fun of fancy alternatives). I don't care much about the taste of a beer, and I'm fine with buying a cheap beer. Up to this point, I haven't had that aha moment where my taste-buds changed and I enjoy an IPA. I think that AB InBev and TAP do a decent job of capturing the market that is okay with simpler beers. 

[Liberty]

What attracted you guys to this business? Just curious, I don't know anything about it.

It's beer  ;D

 

Essentially branded consumer discretionary purchases. They have decent brands (Molson, Coors) and an established distribution network. It's pretty cheap and was 10% off today.

 

While the business may go thru ups-and-downs, especially in terms of management's execution (as we are seeing with other CPG's like Kraft-Heinz), I think product demand will remain relatively more steady (compared to say, Tide detergent).

 

So it's basically, multiple is low, they have scale, brands should have staying power.

 

Was just curious if there was more than met the eye to the thesis.

[Spekulatius]

What attracted you guys to this business? Just curious, I don't know anything about it.

It's beer  ;D

 

Essentially branded consumer discretionary purchases. They have decent brands (Molson, Coors) and an established distribution network. It's pretty cheap and was 10% off today.

 

While the business may go thru ups-and-downs, especially in terms of management's execution (as we are seeing with other CPG's like Kraft-Heinz), I think product demand will remain relatively more steady (compared to say, Tide detergent).

 

So it's basically, multiple is low, they have scale, brands should have staying power.

 

Was just curious if there was more than met the eye to the thesis.

 

In the alcoholic beverage segment, beer is losing market share to spirits and wine. Within the beer segment, TAP’s mass market brands are losing share share to craft beers. I think TAP represents a slow bleeding consumer franchise, somewhere in between a consumer staple and cigarettes, imo.

 

The bleed is probably slow enough that an investment in equity makes sense at this point, especially since pricing holds up.

[michaelj]

What attracted you guys to this business? Just curious, I don't know anything about it.

It's beer  ;D

 

Essentially branded consumer discretionary purchases. They have decent brands (Molson, Coors) and an established distribution network. It's pretty cheap and was 10% off today.

 

While the business may go thru ups-and-downs, especially in terms of management's execution (as we are seeing with other CPG's like Kraft-Heinz), I think product demand will remain relatively more steady (compared to say, Tide detergent).

 

So it's basically, multiple is low, they have scale, brands should have staying power.

 

Was just curious if there was more than met the eye to the thesis.

 

In the alcoholic beverage segment, beer is losing market share to spirits and wine. Within the beer segment, TAP’s mass market brands are losing share share to craft beers. I think TAP represents a slow bleeding consumer franchise, somewhere in between a consumer staple and cigarettes, imo.

 

The bleed is probably slow enough that an investment in equity makes sense at this point, especially since pricing holds up.

 

That seems to be the consensus, although I've seen conflicting data regarding beer's overall market share. The first chart in the following link indicates that beer popularity has been surprisingly steady over the last 5 years. https://news.gallup.com/poll/238100/americans-favor-beer-alcoholic-beverages.aspx

[Guest MarkS]

I've been contemplating picking up share of TAP. Does the fact that TAP is going to restate earnings bother you guys?

[rb]

I've been contemplating picking up share of TAP. Does the fact that TAP is going to restate earnings bother you guys?

That wouldn't bother me too much. AFAIK the restatement had to do with calculation errors on income tax. So not really anything to do with the economics or the integrity of the business.

 

What would bother me is the 5% volume decline for the US.

[LC]

The shift away from beer doesn't really bother me. Wine, liquor, beer. All have been around for centuries, I'm sure the pendulum has swung back and forth multiple times.

 

Wine and liquor don't create the tavern/pub atmosphere like beer does - there will always be a place for it.

 

I generally like the Coors brand. I think it has a unique value compared to say, Budweiser. This could be my Colorado bias, however.  ;D

 

Molson I think it the worst of the Canadian beers but it's like Budweiser - it's the mass market brand. I was at a Habs game and spent my $11 on a Molson or two, when I was last up there. There is something to be said about reliable, consistent, mediocrity :)

 

So it's basically as Liberty said:

So it's basically, multiple is low, they have scale, brands should have staying power.

 

Even if it's a bit of a melting ice cube, I think it's different from say, consumer technology brands. Something like Blackberry phones were essentially completely replaced - the ice cube totally melted. Here I think, the brands may have competition, but will not really be replaced. The worse-case scenario is that it takes longer to earn my money back. Lower risk of a permanent loss of capital, perhaps higher risk of a lower return on capital.