Author Topic: berkshire - cheap?  (Read 52783 times)

racemize

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Re: berkshire - cheap?
« Reply #210 on: June 30, 2018, 12:37:27 PM »


It took me quite a few years of reading before I finally started buying BRK (began watching i
I've shifted my philosophy from trying to find upside (a dubious endeavor for me), to Howard Marks "downside protection", and in this respect, Berkshire is the only company I understand well enough to feel comfortable with.

+1
I came to that conclusion as well between 2009 and 11. After messing around with lesser names and ideas. Downside protection for the really long term is rare. My conclusion is that they simply don’t exist elsewhere. Not just that I cannot find them. The secret is to have lower expectations while taking the downside protection.

You have a huge leg up on me in that you’re doing this as a student. Mine happened in my middle years and the messing around cost me. No big regrets, pleased that I learned that then, not now or later.

Good luck to us.

Students come in all ages.  DooDiligence is in his mid 50's or something like that

hmmm.. goes to show assumptions don't work! More respect for the a-typical student ;)

Talking about assumptions, I can't let go of the chance to point out the topic of FANG versus BRK that consumed so many pages on this thread. Everyone here know to how to zero in on the exact BV and the multiple thereof for BRK literally to two or more decimal places; There are look thru earnings and cost of float and DTL projections and and.....in other words, few assumptions need to be made to value BRK.

How about the FANGs; any assumptions being made?  Naah, don't think so! Growth baby, growth. Just sit back and watch them win it all!

I think you are underestimating the work going into most of FANG by value investors.  I’m assuming Munger is a hero of yours?  If so, you might consider trying to articulate the position of your opponents better than they can, and I don’t think “growth baby growth” counts.

Disclosure: I own Berkshire. Among FANG, I own one (less than Berkshire), think another is worth buying, and will likely be wrong to dismiss the value of a third. And I still might be wrong about the N.


DooDiligence

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Re: berkshire - cheap?
« Reply #211 on: June 30, 2018, 01:13:05 PM »
Maybe one day, it’ll be changed to BANG?

Disclaimer: Not to be taken seriously (or is it?)
(Healthcare 42.9% - ABC BBH CVS DVA EW NVO) | (BRK.B - 14.8%) | (Media & Communication 12.6% - CHTR CMCSA DIS)

(Drinkers & Smokers 13.8% - ABEV MO) | (Auto's & Oil 10.3% - GPC VDE) | (Tech & Comms 5.5% - AAPL SFTBY)

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[prepared 2 wait]

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John Hjorth

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Re: berkshire - cheap?
« Reply #212 on: June 30, 2018, 05:03:10 PM »
I think you are underestimating the work going into most of FANG by value investors. ...

... Disclosure: I own Berkshire. Among FANG, I own one (less than Berkshire), think another is worth buying, and will likely be wrong to dismiss the value of a third. And I still might be wrong about the N.

Here, I've edited the post by Joel quite heavily, not to mention all Joel's quotes, them all basically gone here [naturally they are all above]. Here, I'm doing it with sincere intentions, to focus on what's on my mind here.

- - - o 0 o - - -

Where are we headed? - And don't even think to ask me that question! [<- And it is totally neutral meant!] - Naturally, I don't know the answer.

It's about some pretty hard core [please don't confuse "hard core" here with "deep"] value investors catching interest in the FANGs and doing work on them, and at the same time growth investors showing interest in value cases here on CoBF.

I started noticing it in the beginning of this year, I think.

- - - o 0 o - - -

I think I'll try to branch it out in a separate topic here on CoBF later this Sunday. I think it could become an awesome discussion topic.
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longinvestor

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Re: berkshire - cheap?
« Reply #213 on: July 01, 2018, 08:18:15 AM »


It took me quite a few years of reading before I finally started buying BRK (began watching i
I've shifted my philosophy from trying to find upside (a dubious endeavor for me), to Howard Marks "downside protection", and in this respect, Berkshire is the only company I understand well enough to feel comfortable with.

+1
I came to that conclusion as well between 2009 and 11. After messing around with lesser names and ideas. Downside protection for the really long term is rare. My conclusion is that they simply don’t exist elsewhere. Not just that I cannot find them. The secret is to have lower expectations while taking the downside protection.

You have a huge leg up on me in that you’re doing this as a student. Mine happened in my middle years and the messing around cost me. No big regrets, pleased that I learned that then, not now or later.

Good luck to us.

Students come in all ages.  DooDiligence is in his mid 50's or something like that

hmmm.. goes to show assumptions don't work! More respect for the a-typical student ;)

Talking about assumptions, I can't let go of the chance to point out the topic of FANG versus BRK that consumed so many pages on this thread. Everyone here know to how to zero in on the exact BV and the multiple thereof for BRK literally to two or more decimal places; There are look thru earnings and cost of float and DTL projections and and.....in other words, few assumptions need to be made to value BRK.

How about the FANGs; any assumptions being made?  Naah, don't think so! Growth baby, growth. Just sit back and watch them win it all!

I think you are underestimating the work going into most of FANG by value investors.  I’m assuming Munger is a hero of yours?  If so, you might consider trying to articulate the position of your opponents better than they can, and I don’t think “growth baby growth” counts.

Disclosure: I own Berkshire. Among FANG, I own one (less than Berkshire), think another is worth buying, and will likely be wrong to dismiss the value of a third. And I still might be wrong about the N.

Okay, I did, to the best of my ability in post #126 in this thread. Here is the link that post was centered around,

http://www.thedrum.com/opinion/2018/03/19/marketers-who-prioritise-digital-advertising-have-delusions-effectiveness

http://galbithink.org/ad-spending.htm is another link showing total advertising spend in the US 1919 until 2007.

Here's my Mungerism (trying to state the other side better), which I know to be better

Ad spending appears to have an upper bound at about 2% of GDP (See link#2)
Digital ads will not replace traditional ads completely. (see link #1)
Digital ads are not as effective as real world ads in building brands. (see link #1)
Consumers would prefer not to be advertised to; Think NFLX (free lunch thing practiced by FG allows them to abuse consumers)
Regulation is somewhat late to deal with surreptitious use of personal data by FG. It just got started with GDPR.

As stated in my prior post, for the purpose of this discussion, I am equating FG to FANG.

There it is. Make it better.


« Last Edit: July 01, 2018, 09:14:33 AM by longinvestor »

racemize

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Re: berkshire - cheap?
« Reply #214 on: July 01, 2018, 01:51:33 PM »
Just to be clear - stating the other side better than they can is stating the argument for their side not yours.  Your summary of the opposite side is "growth baby growth"--that is not a well articulated version of your opponent's stance.
« Last Edit: July 01, 2018, 01:56:08 PM by racemize »

longinvestor

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Re: berkshire - cheap?
« Reply #215 on: July 01, 2018, 05:58:00 PM »
Just to be clear - stating the other side better than they can is stating the argument for their side not yours.  Your summary of the opposite side is "growth baby growth"--that is not a well articulated version of your opponent's stance.

I am leaving it at that.

Spekulatius

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Re: berkshire - cheap?
« Reply #216 on: July 07, 2018, 06:37:57 AM »
"Part of the reason why Buffett is holding onto these stocks is precisely this. He probably cannot find alternative mega cap stocks that fit his investing framework other than, e.g., Apple."

And it is not like he is out of cash to buy the FANG stocks or something else. So he is making a conscious decision that he does not want to own that stuff. At least at this price.

If you think that Buffett is purely passive then you should note that Washington Post became Graham Holdings and it is now gone, effectively sold his P&G stake which had bought Gillette, recently forced the hand of executives at USG to sell out.

Therefore I would think that you are quite mistaken to believe that he is not having a very critical look of the portfolio at all times and looking at potential alternatives.

Finally, when things go on for a long time, some assume that it will continue forever. Now we have some millenials who have started to invest in the last 5 or 6 years, never experienced a bear market, never experienced a recession, never seen a true panic and are now smarter than the greatest investor of all times... They probably should read the Intelligent Investors and get a feel for history.

Cardboard


Those are good points, backed by historical Berkshire facts, Cardboard,

I would add Munich Re to your list.

Very few people learn from their own mistakes. Even fewer people learn from the mistakes of others.

Going back to the thread, WEB tends to convert public holdings into fully owned ones, if he gets the chance. He uses tax free exchanges. He may be a sloth in terms of value realization, but he is not entirely inactive..
To be a realist, one has to believe in miracles.

John Hjorth

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Re: berkshire - cheap?
« Reply #217 on: July 09, 2018, 09:52:43 AM »
Has anybody here on CoBF tried to estimate the BV/share for Berkshire end of period 2018H1?

[I have read the posts by Valuehalla in this topic, but I respectfully towards Valuehallas post of June 29th 2018 submit, that the calculations - at least to me - are too cursory. [I hope you don't get me wrong here, Valuehalla ... - I have always enjoyed reading your posts here on CoBF about Berkshire in your capacity as long term Berkshire shareholder.]]

For my part, it's the tax expense in the 10-Q for 2018Q1 that is really teasing me.

Edit:

Dynamic,

Do you have an estimate for what will hit Berskshire P/L with regard to the listed investments for 2018Q2, based on your tool, & based on i.e. unchanged Berkshire portfolio composition, compared to end period 2018Q1?
« Last Edit: July 09, 2018, 11:30:49 AM by John Hjorth »
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alwaysdrawing

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Re: berkshire - cheap?
« Reply #218 on: July 09, 2018, 03:08:36 PM »
Inexact numbers, but these are the share price differences in the big positions (total of 80% of the portfolio)

Ticker   Weight   Change
AAPL   23.1%   10.16%
WFC   12.7%   2.98%
KHC   10.6%   4.00%
BAC   10.1%   -3.11%
KO   9.0%   0.21%
AXP   7.6%   4.56%
PSX   2.7%   16.18%
USB   2.3%   -1.29%
MCO   2.2%   6.04%

Overall that 80% of the portfolio was up $7 billion in value (about 4.6%), share price was down 5.8%.

The remainder of the portfolio you can calculate, but shouldn't be a huge impact.  We obviously also do not know what buys/sells happened in Q2

Valuehalla

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Re: berkshire - cheap?
« Reply #219 on: July 09, 2018, 03:56:54 PM »
The quarter in done

BRK is extremly cheap, just trading at 1,28 x BV

BRK.B price                  $186.65                         -6.4% since end Q1
BV per B                   app  $145.20           1.29              app 3 % up since end Q1
KHC adj BVPS           app  $146.10           1.28        app 3 % up since end Q1

BRK a big big buy !

Hi John, my figures are not cursory. They are deeply calculated. I am just to laszy to publish the details. Soon we will see, how precise these figures were. Even today we are trading just app 1.28 x BV
« Last Edit: July 09, 2018, 04:00:43 PM by Valuehalla »
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