Author Topic: Semper Augustus letter  (Read 31378 times)

crocodon

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Semper Augustus letter
« on: April 07, 2016, 08:23:38 AM »
Interesting and extensive discussion on valuing BRK: http://www.semperaugustus.com/2016BRK.aspx


Libs

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Re: Semper Augustus letter
« Reply #1 on: April 07, 2016, 09:32:42 AM »
Thanks for posting - I thoroughly enjoyed it, especially the 1999 reprise.
My username is not a political statement.....and I'm too lazy to change it.

John Hjorth

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Re: Semper Augustus letter
« Reply #2 on: April 08, 2016, 10:05:07 AM »
crocodon,

Thank you very much for sharing this piece on BRK valuation. It is - by far - and so far - the best piece I have ever read about BRK valuation. H/T for this work of Christopher P. Bloomstran.

I started reading it yesterday at about 10:00 PM, and got "sucked into it" - like was it a black hole - and stopped reading at about 5:00 AM [this morning], without finishing it in full.

To me especially the sections in the piece about:
  • The BRK/General Re merger
  • Deferred taxes related to the regulated & capital intensive businesses
  • Risk
are worth the read.

Again, thank you for sharing.
« Last Edit: April 08, 2016, 10:09:12 AM 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

longinvestor

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Re: Semper Augustus letter
« Reply #3 on: April 08, 2016, 11:51:49 AM »
Awesome. Thanks for posting.

FANG & LEMMINGS commentary captures very well where BRK was in 1999 and is right now. Perhaps will be in 2030...it's deja vu all over again!
« Last Edit: April 08, 2016, 12:31:21 PM by longinvestor »

longinvestor

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Re: Semper Augustus letter
« Reply #4 on: April 09, 2016, 08:02:33 AM »
crocodon,

Thank you very much for sharing this piece on BRK valuation. It is - by far - and so far - the best piece I have ever read about BRK valuation. H/T for this work of Christopher P. Bloomstran.

I started reading it yesterday at about 10:00 PM, and got "sucked into it" - like was it a black hole - and stopped reading at about 5:00 AM [this morning], without finishing it in full.

To me especially the sections in the piece about:
  • The BRK/General Re merger
  • Deferred taxes related to the regulated & capital intensive businesses
  • Risk
are worth the read.

Again, thank you for sharing.

Yes, this piece has been "sucking me in" to read again and again. It's a keeper!

The section on risks is very good. If I worry about anything relating to my large holding of BRK, the "kill me slowly" scenario captures it. Specifically, increasing mediocrity at the subs as leadership transitions happen in the future. Will try to understand as time goes on. Hope this is 30-50 years out. Will be quite old to dead and would be time to go all-in to index funds then, ha!

In the mean time, the "kill me fast" scenario playing out really soon will separate BRK away from the crowd once and for all; the perfect storm mega cat insurance event year, another big one like 2008 etc. happens soon at a time when BRK is sitting on $100B of liquidity. While the world fixates on Buffett's age or the next CEO or BRK's size, the prospects for the BRK shareholder is going to be all about what happens to the other guy, whether in reinsurance or the other utility or railroad etc. in either the "kill me fast or slow" scenarios. Not so much @ BRK. We will take the 1% return on equity over what happens to the other guy, won't we?
« Last Edit: April 09, 2016, 08:08:58 AM by longinvestor »

LongTermView

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Re: Semper Augustus letter
« Reply #5 on: April 09, 2016, 03:57:29 PM »
I like the BNSF and BHE discussions from pages 34 to 39.

The BNSF cash flow statement shows cash distributions of $4 billion, $3.5 billion, and $4 billion for 2015, 2014, and 2013 respectively.  BNSF is generating a lot of cash for Berkshire to spend in other areas.  BHE is different in that they're using its cash for more energy acquisitions as opposed to areas outside of energy, right?

Charlie

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Re: Semper Augustus letter
« Reply #6 on: April 10, 2016, 02:00:50 AM »
Very good analysis of Berkshire. Thanks for posting.  :)

John Hjorth

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Re: Semper Augustus letter
« Reply #7 on: April 12, 2016, 09:19:03 AM »
I like the BNSF and BHE discussions from pages 34 to 39.

The BNSF cash flow statement shows cash distributions of $4 billion, $3.5 billion, and $4 billion for 2015, 2014, and 2013 respectively.  BNSF is generating a lot of cash for Berkshire to spend in other areas.  BHE is different in that they're using its cash for more energy acquisitions as opposed to areas outside of energy, right?
LongTermView,

Yes, I understand it the same way as you do.
”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

John Hjorth

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Re: Semper Augustus letter
« Reply #8 on: April 24, 2016, 11:29:42 AM »
Today I got confirmation from Chad Christensen for inclusion in the Semper Augustus client letter maling list [without being a client], and I replied with a "thanks a lot" and positive words about the BRK analysis also.

Chad replied:

Quote
Thanks for the feedback. We will have a follow-up on the BRK this week coming out.

Chad

So I'm eager to read whatever more to come, and will share it here.
”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

Nicholas

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Re: Semper Augustus letter
« Reply #9 on: April 26, 2016, 03:39:06 AM »
Today I got confirmation from Chad Christensen for inclusion in the Semper Augustus client letter maling list [without being a client], and I replied with a "thanks a lot" and positive words about the BRK analysis also.

Chad replied:

Quote
Thanks for the feedback. We will have a follow-up on the BRK this week coming out.

Chad

So I'm eager to read whatever more to come, and will share it here.

Nice one john. It'd be much appreciated if you could share it.

Thanks