Author Topic: 2017 letter  (Read 10532 times)

John Hjorth

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Re: 2017 letter
« Reply #60 on: February 26, 2018, 02:02:14 AM »
... Keep in mind that Berkshire has something like a 175 billion equity portfolio now that will get marked. If you have a market crash (they happen!) that will seriously distort book in the short term. ....

They have already been marked, rb. The difference going forward compared to the past is the quarterly marking now will go over the income statement, not comprehensive income.
« Last Edit: February 26, 2018, 07:48:12 AM by John Hjorth »
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globalfinancepartners

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Re: 2017 letter
« Reply #61 on: February 26, 2018, 07:46:16 AM »
Brief notes from Buffett's CNBC interview this morning -

- wouldn't rule out owning 100% of a major airline
- will spend "probably all day" reading coming GE 10K "very very carefully"
- accounting at GE "has not been a model"
- "we haven't bought any stock at GE"
- might have to change 120% buyback threshold "a little bit" to get shares.  specifically mentioned 125-127% of book as examples
- on above, sounded like something he would change if a large block became available at those prices, as before.  Not necessarily in advance of a block becoming available.  Subsidiary founders passing away, etc...

- Set up a $6 billion liability at Berkshire Hathaway Energy for a portion of the tax windfall from deferred tax liability adjustment, in anticipation of regulators properly deeming that it should ultimately go to the customers

- net buyer of equities for the year, even including the large block sale of PSX stock back to the company. 

John Hjorth

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Re: 2017 letter
« Reply #62 on: February 27, 2018, 03:06:51 PM »
Do I really need to go there?

There is just so much wrong with what Warren Buffett is saying these days.

For a start, he continues to beat the very worn drum that a basket of hedge fund, fund of funds will under perform an pre-specified index of his choosing. What's worse, is that he conflates that statement with the notion that all types of active management is bad. Not only that, but he states that in all his career (60 years plus of being in the market), that a maximum of ten people he has ever met can hope to achieve the goal of out-performing the index. It seems to me that he is in complete opposition with his previous teachings, namely that an investor with a small amount of capital has a very realistic chance of out-performing the market.

John Hjorth - I take it that you are an adherent of the cult of Buffett? If you are a devotee, then may I ask, have you adopted the advice of your protegé (excuse the pun) and adopted the index strategy? From the recent statements of Buffett, I think it's fairly clear that the circle of ten people that he identified as having the ability to out-perform the market are extremely unlikely to be inhabiting this particular discussion forum.

It seems to me that yourself and other adherents of Warren Buffett would do much better in your present investment strategies than to sell all your holdings and adopt index weighted holdings in the likes of Tesla and Snapchat, companies that truly represent the dynamism of American business (clearly, anything that is not American is abysmal by the standards of Buffet).

I apologize, if my - totally open question, out of pure interest - was bugging towards you.

Three reasons stated here about why I'm stock picking, in stead of indexing:

1. I'm absolutely allergic to and anal about recurring fees. I haven't paid as much as DKK 0,01 [that's called one øre here in Denmark] in recurring fees since I switched to stock picking from 15 years of bond investing. It took me a lot of time to find the right solution for that back then - more than a year.
2. To me, stock picking isen't easy. That does not imply to me, that it's difficult. And difficult is here not the same as hard. It's just - at least to me - extremely work intensive, and time consuming. And I just happen to love that activity.
3. About indexing: Of the S&P500 constituents, the FAANGs fills about 11 percent. S&P500 earnings yield about right now is ~ 4.3 percent. You can take that, or not. If one don't, one has to work, by doing search and analysis. It's not impossible - even today - to find companies with positive growth prospects, considering carefully the downside risks  - and at the same time with a postive judgement about overall quality, that have an earnings yield above ~4.3 percent.

- - - o 0 o - - -

Furthermore, personally I distinguish quite sharp between Mr. Buffett, the Berkshire CEO & Chairman, and Mr. Buffett, the private US citizen & ie. taxpayer, venting his personal opinions publicly. For several months now, "The Snowball" has been open here for my part at p. 543 - "White Nights", with absolutely no appeal for me read on.

With that angle, your post makes a lot of sense to me, too.
« Last Edit: February 27, 2018, 03:13:27 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

CorpRaider

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Re: 2017 letter
« Reply #63 on: February 27, 2018, 05:49:43 PM »
Brief notes from Buffett's CNBC interview this morning -

- wouldn't rule out owning 100% of a major airline
- will spend "probably all day" reading coming GE 10K "very very carefully"
- accounting at GE "has not been a model"
- "we haven't bought any stock at GE"
- might have to change 120% buyback threshold "a little bit" to get shares.  specifically mentioned 125-127% of book as examples
- on above, sounded like something he would change if a large block became available at those prices, as before.  Not necessarily in advance of a block becoming available.  Subsidiary founders passing away, etc...

- Set up a $6 billion liability at Berkshire Hathaway Energy for a portion of the tax windfall from deferred tax liability adjustment, in anticipation of regulators properly deeming that it should ultimately go to the customers

- net buyer of equities for the year, even including the large block sale of PSX stock back to the company.

Anyone know the identity of the other NYSE company that doesn't give restricted stock awards and pay for directors E&O insurance?