Author Topic: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak  (Read 6702 times)

Green King

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #30 on: May 02, 2017, 04:14:00 PM »
Nobody actively reads 12 or 14 hours a day. It is an impossibility. You have to realize this is a marketing piece. What is communicated is that their focus is on absorbing information and making a few critical decisions. People take things way too literally. But now this quote will be making the rounds as gospel for years to come... Oh well.


Nail, head...

I think they are serious. when Buffett said the best way to learn about the stock market is to look at companies from A to Z Which I did, I have looked at all the companies on the TSX. It was an extremely rewarding experience once I got to the last 100.

But there is no way for me to do 12 hrs on a long term basis and absorb the information. They must be pretty special like major league athletes. I am a bit skeptical of its returns on time spent since most of the world's information and insight is run by 10% to 20% of the ideas. He should be getting to diminishing returns pretty quickly at that paste.
« Last Edit: May 02, 2017, 04:18:38 PM by Green King »
GK

Dynamic

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #31 on: May 03, 2017, 12:31:01 AM »
I think making those returns without significant leverage and with an adequate margin of safety, and sticking to companies that themselves have little net debt that might juice their ROE but might also put the company at risk in the long run.

CHTR
Pretty much all Liberties (LSXMA/SIRI/LBTYA/LILA)
GM
Airlines

I am sure I am missing some more... http://www.dataroma.com/m/holdings.php?m=brk

Care to comment?  8)

Yeah, you got me there. I oversimplified a great deal about how I think T & T seem to view risk management.

It's more about how much risk is acceptable and whether the risks in individual shares could wipe out or severely damage the portfolio (or for wholly-owned businesses, the whole of Berkshire). Some of this is reflected in position sizing and portfolio composition.

I think in some of these cases they are just dirt cheap enough to have a large margin of safety. This boosts the likely total return and boosts the dividend yield meaning that over a few years a substantial portion of the purchase price has been returned as cash.

In certain industries - e.g. banks like Wells Fargo or Railroad or Regulated Utility businesses with extremely steady earnings, the leverage is sustainable with very low risk of default. Where these are subsidiaries of Berkshire, the debt is non-recourse to Berkshire, protecting the parent should the worst ever happen. And also, Berkshire's utilities at BHE keep their costs so low that the rest of the industry will be swimming in red ink by the time that BHE is in trouble. I think Ted Combs in particular, with his previous history poring over banks, looks deep into the financials thinking about the vulnerability under extreme conditions, and would, in the case of purchasing wholly owned subsidiaries, be someone, like Warren, to trust to ensure that a low probability disaster at a subsidiary wouldn't bring down Berkshire as a whole, by putting the correct structural safeguards in place. And I think when he's providing content for the annual report, he'll be sure to communicate that to the shareholders as Warren does now when he mentions the non-recourse nature of BHE's debt which instead is backed up by a long history of rock-solid revenues that reassures its lenders.

In certain cases, the risk of a total loss is acceptable from a portfolio perspective or from the perspective of a basket of similar stocks. A good example here is the basket of four airlines. Even if one of them went bankrupt or breached debt covenants and wiped out its equity holders by converting debt to equity, it's not likely that all four would go bust, the survivors would likely pick up the assets of the one that did on the cheap, and they all had enough margin of safety in the purchase price that the basket would still be a good buy even if one went bust. (Unless BRK has misread the industry's turnaround and it reverts to a cyclical low in profitability, making it the sort of value trap where a tasty-looking low P/E ratio is caused by an unsustainably high E that is going to plummet for the rest of the cycle)

I don't understand these stocks well, so I certainly don't feel qualified to comment on the Liberties or CHTR. I'm wondering if some of the Liberties might have been medium term plays that could be on their way out of the portfolio if they reach fuller valuation, e.g. FWONK etc could get rather lofty market prices due to the current appeal of a close Formula 1 season, which might make it appealing to take a profit and reinvest in a cheaper opportunity elsewhere, considering that next season's races might be more of a procession. I haven't got my head around the apparent changes in BRK's holdings of these companies or their capital structures and classes of shares, but for my own purposes, they're a small enough proportion of BRK that I'm not worried by not understanding them.
« Last Edit: May 03, 2017, 01:16:31 AM by Dynamic »

LC

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #32 on: May 03, 2017, 07:52:20 AM »
Have these guys spoken about the rationale behind allocating their $10B?

I never heard of them prior to their anointing, did anyone follow them when they ran their own funds?
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Dynamic

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #33 on: May 03, 2017, 11:46:56 AM »
I don't think it has been confirmed which positions are theirs, so they aren't going into much detail. Also they manage some pension assets for parts of Berkshire.

I certainly didn't follow them before but would love to hear from anyone who did.

It does appear from a magazine interview posted on this board a couple of months ago, that Ted Weschler may have been behind the original Apple investment which I presume Buffett then got behind with larger sums. He explained he saw it as an​ enduring consumer brand like Nike more than a technology hardware company and also mentioned the strong services revenues IIRC. I'm prone to memory errors re Apple because of my​ own reasons for buying so much of it being fairly similar.

I think someone here also mentioned him talking about a particular presentation from United Airlines that opened his eyes to what appeared to be a permanent change to the economics of the major airlines, presumably indicating that he helped instigate Brk's interest in the big four, whether or not they are considered as Ted's positions.

I suspect there's a lot that we won't know about, but that we can infer some things from the history of their old fund portfolio holdings.

LR1400

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #34 on: May 12, 2017, 12:38:39 PM »
So, what is the best place to find a synopsis of companies A to Z?

I believe Buffett used Moody's....?

Where can hear be found today in a similar format?

globalfinancepartners

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #35 on: May 12, 2017, 12:53:54 PM »
They are mostly online these days.  ValueLine, Morningstar, GuruFocus has a product.

Walker's Manual of Unlisted Stocks if it is still around - a slightly out of date copy should do you fine

I should add that Walker's manual is way out of print, but oddball has a shorter list of unlisted stocks that is kept online here - it is a subscription product.  There is also a separate product for the small banks.

http://unlistedstocks.net
an example report -
http://unlistedstocks.net/company_detail.php?company_id=1

So, what is the best place to find a synopsis of companies A to Z?

I believe Buffett used Moody's....?

Where can hear be found today in a similar format?
« Last Edit: May 13, 2017, 09:56:29 PM by globalfinancepartners »

LR1400

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #36 on: May 13, 2017, 05:59:03 PM »
Thanks!

DooDiligence

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Re: Warren Buffett's money managers, Todd Combs and Ted Weschler, speak
« Reply #37 on: May 22, 2017, 06:59:30 AM »
They are mostly online these days.  ValueLine, Morningstar, GuruFocus has a product.

Walker's Manual of Unlisted Stocks if it is still around - a slightly out of date copy should do you fine

I should add that Walker's manual is way out of print, but oddball has a shorter list of unlisted stocks that is kept online here - it is a subscription product.  There is also a separate product for the small banks.

http://unlistedstocks.net
an example report -
http://unlistedstocks.net/company_detail.php?company_id=1

So, what is the best place to find a synopsis of companies A to Z?

I believe Buffett used Moody's....?

Where can hear be found today in a similar format?

I just hit the B's in Walkers Penny 2000 ed.

Seeing how different companies go from public to PE or get absorbed into a larger entity or simply go all Zombie, gives more insight into what could happen to your cherished positions.

An example regarding ATS Money Systems.

Who wants to own a company that makes cash counting machines in a society going cashless?

http://www.uv.es/~fores/programa/griffith_cashless.html

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De la Rue, that's who (imagine that, a company that prints money wanting to own a money counting business.)

http://www.delarue.com

http://www.prnewswire.com/news-releases/proposed-merger-of-ats-money-systems-inc-announced-71515682.html

http://www.investegate.co.uk/article.aspx?id=200103021201048247Z

Good history of the company's trials & tribulations

http://www.fundinguniverse.com/company-histories/de-la-rue-plc-history/

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De la Rue looks Ugly, lumpy & went on to pay out well over their mkt cap in dividends over the past decade (not saying it was due 2 this purchase, just that you find stuff like this looking through a 17 year old Walker's listing)

I'm not pumping De la Rue, just thought it showed an interesting example of deal flow...
abc | abev | aapl | bbh | cri | ew | esrx  | ffxdf | nvo | rgr | vde

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