Author Topic: Is This Buffett's AT&T Moment?  (Read 5153 times)

stahleyp

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Re: Is This Buffett's AT&T Moment?
« Reply #20 on: February 25, 2019, 07:57:59 AM »
good points gfp. Shame Buffett didn't call Gates first! ;)
Paul


DanielGMask

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Re: Is This Buffett's AT&T Moment?
« Reply #21 on: February 25, 2019, 08:08:29 AM »
Lol now he’s on tv saying he s not a buyer of AAPL here, but would be if it got cheaper!!!
First, it was cheaper, much cheaper not too  long ago, and he did nothing. Second, wasn’t he buying like a drunken sailor a couple quarters ago? At much higher prices? WTF happened to Warren Buffett?

I haven't had a chance to watch the CNBC interviews yet but from what I've read, it doesn't sound like he's explicitly saying Berkshire didn't buy more Apple at the beginning of January when it spend a little time in the $140s, I think he probably said he's not buying NOW (meaning around $172), and we don't have much firm evidence of Berkshire buying much at prices above $180 or so even in 2018Q3. I certainly recall thinking they probably added most of their Q2 buys in the dips into the $150s, even though AAPL ended Q2 much higher.

In December, AAPL spent only about 10 trading days below $160 and only broke below $170 around 7th December.

I was thinking about at what price I'd buy back into AAPL in January, and I decided that based on opportunities elsewhere, it would probably need to be $125-$135 for me to have enough margin of safety for a large high conviction position, which would also have bagged me an extra 10-15% or so of return if those prices had come about, compared to the $145 or so it was selling for at the time for a day or two.

I think it's possible that Berkshire could have bought a little more AAPL early this quarter, though the lowest prices were only available for a short period right at the start of January, not allowing Berkshire to buy a lot, and we're probably not going to find out roughly how much (if any) until 4th May, and exactly how much on 15th May.

You are correct! He clearly stated that if it were cheaper he would be buying it. He said BRK's avg cost is around $140.
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Value^2

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Re: Is This Buffett's AT&T Moment?
« Reply #22 on: February 25, 2019, 08:25:29 AM »
I thought his AT&T Moment was about two years ago when he went all in w HRC... He still seems to be butt-hurt about that.

cubsfan

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Re: Is This Buffett's AT&T Moment?
« Reply #23 on: February 25, 2019, 12:03:31 PM »
Buffett buys it, Gates calls him and tells him his take on it, Buffett reconsiders how much he really understands the future competitive dynamics of the industry and sells.  Better than the IBM situation!

thanks. I assumed oracle was from Todd or Ted. Buffett buying and selling so quickly is a bit of a concern for me.

Well - I'm not sure I totally understand the DB area anymore either with SAAS in the picture.
It may be that with Amazon's move away from Oracle DB, which is relatively recent, that creates some
fear of Oracle's moat eroding. Never thought I'd see it happen with Oracle, but who knows.

rb

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Re: Is This Buffett's AT&T Moment?
« Reply #24 on: February 25, 2019, 01:05:05 PM »
It's been happening for a while now. Look at Oracle's DB sales, esp unit sales. They suck. Oracle's basically a dinosaur in the DB space. All they do now is try to monetize the hell out of their installed base. That's why I was shocked when I saw Oracle pop up on BRK's 13f. Glad it went away.

cubsfan

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Re: Is This Buffett's AT&T Moment?
« Reply #25 on: February 25, 2019, 02:01:36 PM »
Well, trying to get rid of an Oracle database is like trying to get rid of all your Excel/Word suites - not so easy.
The conversion costs are going to be massive and take years.

Oracle will still make plenty of money on license upgrades, etc.  Most corporations have better things to
do then spending time & money converting applications that work.

I'll be real interested to see how Amazon pulls the off.

rb

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Re: Is This Buffett's AT&T Moment?
« Reply #26 on: February 25, 2019, 02:13:02 PM »
That's precisely correct. It's the IBM strategy. IBM's been doing it for yeeeears across all their products. It will make a good chunk of change. But in the end it is a loosing strategy. Look at where IBM is today compared to say Microsoft (who has been feasting at Oracles's DB trough).

Since you've brought up office suites, when I was buying Microsoft back in 2011 I noticed that IBM still had close to a 10% market share is office suites with Lotus. So it was still milking it. But when one thought office suite, no one thought IBM or Lotus.

Viking

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Re: Is This Buffett's AT&T Moment?
« Reply #27 on: February 25, 2019, 03:47:43 PM »
Well, trying to get rid of an Oracle database is like trying to get rid of all your Excel/Word suites - not so easy.
The conversion costs are going to be massive and take years.

Oracle will still make plenty of money on license upgrades, etc.  Most corporations have better things to
do then spending time & money converting applications that work.

I'll be real interested to see how Amazon pulls the off.

This sounds like an insurance business in runoff... can be profitable if handled the right way. Perhaps Berkshire should create a ‘runoff’ packaged goods operation to give legacy brands a home :-)

meiroy

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Re: Is This Buffett's AT&T Moment?
« Reply #28 on: February 25, 2019, 04:19:42 PM »
I don't really follow BRK so this might be complete nonsense but after watching this whole interview:

1. He says they can't really sell due to size-illiquidity issues.
2. He realized that a position he held was over-valued in advance.

My conclusion:

1. These days, don't invest in such big illiquid positions.
2. If unable to invest in the private market then return money to shareholders.


This seems to be the conclusion as he also slowly realizes how disruptive markets have become, it's not just that investors have access to information.

Now, he is an awesome investor and one does not have to be right all the time, but Heinz failed due to concept failure as he puts it.  Couldn't this same concept be applied to Coke as well?  Huge illiquid investment.

His buying/selling of Oracle pretty much says that he now realizes this is out of his circle of competence.  And to a sense, he knew that before. So why did he do it?  Did they not buy any more Apple because of this?




Spekulatius

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Re: Is This Buffett's AT&T Moment?
« Reply #29 on: February 25, 2019, 04:24:20 PM »
Well, trying to get rid of an Oracle database is like trying to get rid of all your Excel/Word suites - not so easy.
The conversion costs are going to be massive and take years.

Oracle will still make plenty of money on license upgrades, etc.  Most corporations have better things to
do then spending time & money converting applications that work.

I'll be real interested to see how Amazon pulls the off.

Yes, most companies have better things to do, but over time, companies do change their systems. Then there is also natural attrition from mergers etc. , where the merged companies typically pick the cheaper system/application/SAAS system and the dinosaur application will get sunsetted.
To be a realist, one has to believe in miracles.