Buffett/Berkshire - general news

[Cigarbutt]

^To the question, what's wrong, Warren? I don't know the answer and wonder if he has lost it or if the market has lost it. I guess it all comes down to an individual decision with personal investment implications but here's an historical input that is potential food for thought. The link is an indirect reference to a WSJ article and was supplied by, I think, a COBF member:
https://brianlangis.wordpress.com/2018/09/26/whats-wrong-warren/

The question here is not to compare both periods but simply to mention that, for some, in 1999, the obvious choice was to bet on Yahoo.
The verdict 20 years later:

                                               1999               2019
MKT CAP Yahoo (B)                    120                 48*
MKT CAP BRK (B)                       83                  540

*I'm no Yahoo or related specialist and the number represents what I come to as an estimate of liquidation value resulting from relatively recent transactions.

A potential message: The environment keeps on changing but some principles endure and the retained earnings aspect may only play out over time.

[Cardboard]

I think that Buffett best strategy going forward due to size and lack of large mom and pop shop running to him to get bought out, would be to dollar cost average monthly incoming cash flow and a fraction of cash pile into an S&P 500 ETF and do opportunistic share buybacks.

This would pretty much eliminate any succession risk and help BRK continue to beat the S&P via embedded leverage or float.

[alpha]

I think that Buffett best strategy going forward due to size and lack of large mom and pop shop running to him to get bought out, would be to dollar cost average monthly incoming cash flow and a fraction of cash pile into an S&P 500 ETF and do opportunistic share buybacks.

This would pretty much eliminate any succession risk and help BRK continue to beat the S&P via embedded leverage or float.

I think you should go review Berkshires history, specifically the flood of large high-quality companies they purchased in quick succession when the junk bond market dried up at the end of the dot com bubble.

[RuleNumberOne]

Buffett cannot get in and get out without moving the price drastically. In other words, he has a wide bid-ask spread. Mike Burry was right about the lack of liquidity in many stocks.

Momentum hedge funds want their 2 and 20. They don't care if the stock price crashes on the way out - they just want a few quarters/years of 2-and-20 and they are satisfied. Buffett is investing his own money.

[John Hjorth]

Mr. Buffett doesn't give a heck about bid-ask spreads. Nor does he care about momentum hedge funds.

[bizaro86]

Mr. Buffett doesn't give a heck about bid-ask spreads. Nor does he care about momentum hedge funds.

While this isn't directed to me, I doubt the previous poster meant bid 49.98/ask 49.99 for bid-ask spreads.

If Buffett wants to buy a full company away from the stock market, he probably needs to pay a premium, maybe in the 30% range. The ask for the whole firm being greater than the ask for a single share. Similarly, if he takes a big position in something, once disclosed (either quarterly or at 5% of target) that has the potential to increase the price making the remainder of the position more expensive.

[John Hjorth]

Mr. Buffett doesn't give a heck about bid-ask spreads. Nor does he care about momentum hedge funds.

While this isn't directed to me, I doubt the previous poster meant bid 49.98/ask 49.99 for bid-ask spreads.

If Buffett wants to buy a full company away from the stock market, he probably needs to pay a premium, maybe in the 30% range. The ask for the whole firm being greater than the ask for a single share. Similarly, if he takes a big position in something, once disclosed (either quarterly or at 5% of target) that has the potential to increase the price making the remainder of the position more expensive.

Oh, spare me.

[bizaro86]

Mr. Buffett doesn't give a heck about bid-ask spreads. Nor does he care about momentum hedge funds.

While this isn't directed to me, I doubt the previous poster meant bid 49.98/ask 49.99 for bid-ask spreads.

If Buffett wants to buy a full company away from the stock market, he probably needs to pay a premium, maybe in the 30% range. The ask for the whole firm being greater than the ask for a single share. Similarly, if he takes a big position in something, once disclosed (either quarterly or at 5% of target) that has the potential to increase the price making the remainder of the position more expensive.

Oh, spare me.

I apologize if my post offended you.

[james22]

Any of you who believe Buffett has "lost it" believe the share price will jump when he passes or steps down?

Why not?

[Gregmal]

Any of you who believe Buffett has "lost it" believe the share price will jump when he passes or steps down?

Why not?

No, but that is only because there is still a consensus that consists of cult followers who believe Buffett still has magical power. I think the opportunity would present itself a wee bit after, once all the super talented people currently underneath him get bigger pieces of the pie and can get back to doing what they do best without the fear of Grampa looking over their shoulder.