Author Topic: What are you buying today?  (Read 979343 times)

John Hjorth

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Re: What are you buying today?
« Reply #2610 on: December 02, 2017, 05:13:24 AM »
It's good humor, DooDiligence,

A few years from now you will be able to look back at this post of yours and at that future point in time think that what mattered was that you actually bought in stead of staying on the sideline. Because longinvestor is right:

...The best price to buy is the current price. As long as the stock is selling below IV.

It's a hedge against bad things happening to you in the future. [Falling in love again etc.]
”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


DooDiligence

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Re: What are you buying today?
« Reply #2611 on: December 02, 2017, 08:53:52 AM »
Yep to you both!

Oddly enuf I'm up 3.something% on the ownership stake (meaningless stat.)

It's truly the ONLY company I feel totally comfortable doing this with.

Market cap < replacement value

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Quick question; does the capital structure serve to hold TBV in this ridiculously low range?
abc 2.6 | abev 2.4 | aapl 0.9 | bbh 3.3 | brk.b 11.6 | chtr 4.2 | cvs 5.7 | dva 5.6 | dis 4.1 | ew 2.1 | gpc 2.8 | mo 6.2 | nvo 5.1 | sftby 2.3 | vde 4.2

(%'s held @ cost, PV allos are slightly 2 significantly higher. includes a slowly dwindling cash pile.)

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globalfinancepartners

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Re: What are you buying today?
« Reply #2612 on: December 02, 2017, 09:00:54 AM »
By "TBV" are you referring to tangible book value?  Or just book value / shareholder equity?

Book Value is what it is because of huge liabilities he calls insurance 'float'.  Most people think it has some value greater than negative $113 Billion.

Tangible book value is lower still because of huge sums of goodwill and intangible assets that result from buying high quality companies in their entirety at prices higher than their identifiable tangible assets.  You know, their durable competitive advantage, market position, trade names, etc etc etc

Unless it starts to look like Berkshire develops a reputation for overpaying for acquisitions, tangible book value doesn't have a lot of utility for a company like BRK.

Yep to you both!

Oddly enuf I'm up 3.something% on the ownership stake (meaningless stat.)

It's truly the ONLY company I feel totally comfortable doing this with.

Market cap < replacement value

---

Quick question; does the capital structure serve to hold TBV in this ridiculously low range?
« Last Edit: December 02, 2017, 09:03:11 AM by globalfinancepartners »

DooDiligence

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Re: What are you buying today?
« Reply #2613 on: December 02, 2017, 09:28:18 AM »
By "TBV" are you referring to tangible book value?  Or just book value / shareholder equity?

Book Value is what it is because of huge liabilities he calls insurance 'float'.  Most people think it has some value greater than negative $113 Billion.

Tangible book value is lower still because of huge sums of goodwill and intangible assets that result from buying high quality companies in their entirety at prices higher than their identifiable tangible assets.  You know, their durable competitive advantage, market position, trade names, etc etc etc

Unless it starts to look like Berkshire develops a reputation for overpaying for acquisitions, tangible book value doesn't have a lot of utility for a company like BRK.

Yep to you both!

Oddly enuf I'm up 3.something% on the ownership stake (meaningless stat.)

It's truly the ONLY company I feel totally comfortable doing this with.

Market cap < replacement value

---

Quick question; does the capital structure serve to hold TBV in this ridiculously low range?

Thanks 4 pointing out the diffs (I should not have even said T or BV.)

I've got this thing stuck in my head about looking at the market cap of a company & comparing it to the cost of replicating the business & was simply confusing myself by adding BV to the thought process (that's for companies that might go bankrupt right?)

Probably shouldn't go there since I'd be relying on the calculations of others regarding replacement value.

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Old hat for u & most here but:

https://www.fool.com/investing/general/2014/12/12/understanding-the-true-value-of-warren-buffetts-be.aspx

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As to why the market cap is what it is; does the base of "A" shares keep the valuation stable?
I understand that the "B" shares were largely created for gifting purposes?
« Last Edit: December 02, 2017, 09:35:49 AM by DooDiligence »
abc 2.6 | abev 2.4 | aapl 0.9 | bbh 3.3 | brk.b 11.6 | chtr 4.2 | cvs 5.7 | dva 5.6 | dis 4.1 | ew 2.1 | gpc 2.8 | mo 6.2 | nvo 5.1 | sftby 2.3 | vde 4.2

(%'s held @ cost, PV allos are slightly 2 significantly higher. includes a slowly dwindling cash pile.)

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https://twitter.com/tunawish

globalfinancepartners

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Re: What are you buying today?
« Reply #2614 on: December 02, 2017, 10:55:32 AM »
$480 Billion market cap seems about right.  Not crazy low, could be a little low.  If they were willing to use leverage to buy a $150 billion business it would look too low in retrospect.

Low turnover might stabilize the price, but in my experience Berkshire tends to level out in market value for a while and then make fairly quick reappraisals higher as some perception changes a bit.  Because of the nature of continually hitting all time highs and a lot of long term, low basis, holders - Berkshire's share price tends to respond a lot to violating round number options strike price levels (190 for example) because people are forced to cover their short 'covered calls.'  If this FIFO law comes into being, that would only exacerbate those type of moves going forward.

DooDiligence

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Re: What are you buying today?
« Reply #2615 on: December 02, 2017, 02:41:45 PM »
$480 Billion market cap seems about right.  Not crazy low, could be a little low.  If they were willing to use leverage to buy a $150 billion business it would look too low in retrospect.

Low turnover might stabilize the price, but in my experience Berkshire tends to level out in market value for a while and then make fairly quick reappraisals higher as some perception changes a bit.  Because of the nature of continually hitting all time highs and a lot of long term, low basis, holders - Berkshire's share price tends to respond a lot to violating round number options strike price levels (190 for example) because people are forced to cover their short 'covered calls.'  If this FIFO law comes into being, that would only exacerbate those type of moves going forward.

Not good news for someone who's looking for a big dip to shove "all in" & free up a lot of time to study something other than equities  ;)

Thanks for the illumination (once again.)
abc 2.6 | abev 2.4 | aapl 0.9 | bbh 3.3 | brk.b 11.6 | chtr 4.2 | cvs 5.7 | dva 5.6 | dis 4.1 | ew 2.1 | gpc 2.8 | mo 6.2 | nvo 5.1 | sftby 2.3 | vde 4.2

(%'s held @ cost, PV allos are slightly 2 significantly higher. includes a slowly dwindling cash pile.)

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https://twitter.com/tunawish

globalfinancepartners

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Re: What are you buying today?
« Reply #2616 on: December 05, 2017, 07:27:12 AM »
purchased February 2018 150 strike call options on Apple at 21.68 average cost.  this is a trade obviously

update - added more of same at 20.25, new average cost is 20.967
« Last Edit: December 06, 2017, 09:14:30 AM by globalfinancepartners »

DooDiligence

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Re: What are you buying today?
« Reply #2617 on: December 05, 2017, 08:52:26 AM »
A little more CVS.

The Aetna purchase looks expensive today but I believe it'll work out.

Less breakfast cereal & beach chairs & more Minute Clinics & medical supplies.

Which insurer would WalMart try to buy if they were so inclined?

I think CVS has an edge on becoming a healthcare superstore where WalMart won't be able to focus.
« Last Edit: December 05, 2017, 08:54:03 AM by DooDiligence »
abc 2.6 | abev 2.4 | aapl 0.9 | bbh 3.3 | brk.b 11.6 | chtr 4.2 | cvs 5.7 | dva 5.6 | dis 4.1 | ew 2.1 | gpc 2.8 | mo 6.2 | nvo 5.1 | sftby 2.3 | vde 4.2

(%'s held @ cost, PV allos are slightly 2 significantly higher. includes a slowly dwindling cash pile.)

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https://twitter.com/tunawish

Spekulatius

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Re: What are you buying today?
« Reply #2618 on: December 07, 2017, 03:50:40 AM »
recent buys are MLPs - BPL and SEP, which seem to have come under selling presssure (tax loss selling?)

I also bought some RE - a solid up insurance company that got hit by the hurricane season (like just about anyone else in the industry) , but has a very solid history of book value growth and reserving history. I think the latter is a better buy than BRK right now.
To be a realist, one has to believe in miracles.

Og

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Re: What are you buying today?
« Reply #2619 on: December 07, 2017, 12:30:34 PM »
recent buys are MLPs - BPL and SEP, which seem to have come under selling presssure (tax loss selling?)

I also bought some RE - a solid up insurance company that got hit by the hurricane season (like just about anyone else in the industry) , but has a very solid history of book value growth and reserving history. I think the latter is a better buy than BRK right now.

RE has compounded BV at 12% since 1995. You don't think there's better stuff out there? Do you think they will compound higher in the future? Paying around book value seems good but can probably do better, no?