Baby Berkshire - is there one?

[Gilp]

Sometimes it is possible to know when some people headed to greatness in their young age.

Sometimes it takes a lot of time to hear about these people, when you are not around.

I think there are a lot of interesting people here in the community, I do believe you noticed some interesting investors that are:

 

1. Still young and have many more years ahead of them.

2. Are unknown in the mass media or almost  unknown.

 

Would like to hear from you, in order to follow, learn and maybe invest in their fund.

[jouni1]

allan mecham of arlington value. what little i've read about him and seen on the 13F's, he seems to be smart and doing the right things. still young at 30-something i believe.

 

his fund is closed but the portfolio wouldn't be too hard to copy. i look forward to any new buys from him more than brk ones these days.

 

and richard handler of leucadia? i'd be willing to bet that at least one of them is going to beat the market by a nice margin for the next 30 years.

[Guest]

Allan is very good. No doubt. This guy named Sanjeev Parsad is also not too shabby. Oceanstone fund is an interesting one (OSFDX). The guy's letters aren't very informative but he has a lot of conviction and his track record is insane. He started the fund in late 2006 so he went through the full brunt of the downturn. He made almost 25% in 2007 and lost only about 10% in 2008...followed by a 264% return in 2009. My main concern is that he doesn't have a long track record and the letters don't give a lot of information. The performance is hard to ignore though. I don't really think we'll have another Buffett, but this is a fund that has some potential.

[racemize]

I find FRMO very interesting, though they are quite different than Buffett.

[Palantir]

IMO you should never look for the "next" anything. You are just using dated mental models to fight yesterday's war, so to speak, and you'll miss out on great emerging firms that should be evaluated very differently.

 

Peter lynch has hinted at this, but to expound on this more, how many times has another firm successfully cloned another mega firm to equal heights?

[Dustin T]

I certainly agree that one can find folly looking for the "next" berkshire, it would be easy to focus on things that weren't core to Berskhire's success like fun annual letters or owning an insurance business.

 

I think it's useful all the same, history doesn't repeat itself but it rhymes. Jeff Bezos isn't Sam Walton but there are things about Amazon that remind me of Wal-mart in the Walton days. Elon Musk isn't Thomas Edison but I think he's our generations version nonetheless.

 

I've made it a point to read biographies about Rockefeller, Morgan, Vanderbilt, Walton, Steve Jobs, Warren Buffett and all the titans of industry. There are a lot of commonalities between them and while I never expect to see a clones of any of them having an understanding and looking for young investors, industrialists, inventors is I think a very useful exercise.

[Palantir]

I think it's useful all the same, history doesn't repeat itself but it rhymes. Jeff Bezos isn't Sam Walton but there are things about Amazon that remind me of Wal-mart in the Walton days. Elon Musk isn't Thomas Edison but I think he's our generations version nonetheless.

 

I agree it is interesting and useful to study patterns, but I feel that thinking can get too rigid. Point being, many value investors admire WMT and would love to own it at an early stage. How many of them picked up AMZN ten years ago? :)

 

But yes, a brilliant (and young) CEO seems to be the common thread!

[hyten1]

i think looking/searching for the next wmt or amzn or apple or whatever is futile. if its doable in a repeatable way (not just being lucky), i think whoever can do this will be the riches person on earth.

 

the time and effort is better spent just looking for value

 

just my 2 cents.

 

EDIT: also you can easily figure out what the market thinks the next msft, goog, brk or whatever will be.  many of these companies have very high valuations (nflx, tsla, etc.) i highly doubt value investors are willing to pay up for the potential. now the question is can you find the company that will be the next big thing, that the market doesn't think so.

 

 

[CorpRaider]

Seems highly likely to me that MKL will use the formula of Berkshire to create great wealth, but it won't quite be the next Berkshire.  Maybe a "less rich man's" BRK.  But that's still probably good enough for all intents and purposes.  Really only Greenblatt is a peer to Warren in performance terms (check out the discussion of his record in Dhando).  If he took over something for permanent capital and didn't draw a 2 and 20 next week, I would be all kinds of "in".

[roughlyright]

stahleyp,

 

This fund you were referring to sounds amazing. He has only 40% invested and his performance is phenomenal. Can you share more information and any other tid bits about the manager?

 

- Roughlyright

 

oceanfund.pdf

[premfan]

I certainly agree that one can find folly looking for the "next" berkshire, it would be easy to focus on things that weren't core to Berskhire's success like fun annual letters or owning an insurance business.

 

I think it's useful all the same, history doesn't repeat itself but it rhymes. Jeff Bezos isn't Sam Walton but there are things about Amazon that remind me of Wal-mart in the Walton days. Elon Musk isn't Thomas Edison but I think he's our generations version nonetheless.

 

I've made it a point to read biographies about Rockefeller, Morgan, Vanderbilt, Walton, Steve Jobs, Warren Buffett and all the titans of industry. There are a lot of commonalities between them and while I never expect to see a clones of any of them having an understanding and looking for young investors, industrialists, inventors is I think a very useful exercise.

 

You have made some great points. In looking for the next brk how about you creating your own next brk? You know the formula i'm sure by reading the letters. Your core business wont be insurance but, maybe a nice small business that generates above ROIC. The next question is can it be scaled? If it can you might have a repeatable model. Use the excess cash to either scale up or acquire great ROIC public companies. Thats the formula! To really be like brk you need cheap leverage. The best leverage for regular people are getting a royalty fee on some asset's growth.

 

So either managing money,  being a franchisor, locking in a long term fixed rate,  or becoming a consultant in some niche area. Or take control of a public company and use that as your platform. The key is cheap leverage and using that cheap leverage to buy above average ROIC  things.

 

 

I would venture to say its easier to create your own brk than find one cause you have the blueprint in his letters.  In looking for the next brk i have no clue where it is! The future is now so the  next brk is doing what i listed above in some matter right NOW. The next brk probadly wont have insurance as its core business. So the key for the next brk is how are they obtaining there cheap leverage. Debt is not ideal but not bad with these rates. Maybe a franchisor or a money manager using excess cash to buy more excess cash in the future.  Follow the cheap leverage and if the owner/operator is a value investor you might have a shot. But, you wont know it for another 20 years from now ;)

[Mephistopheles]

Word on the street is that SHLD is the next BRK and Eddie Lampert is the next Warren Buffett.

[turar]

Baby what now?

;)

 

http://www.myplaniq.com/articles/wp-content/uploads/nyt-best-stocks.gif

[CorpRaider]

Nice list.  If you spot the next Home Depot, be sure and let me know.  I'm buying some CFX dammit.