Author Topic: Wedgewood Partners on selling their BRK stake  (Read 10733 times)

John Hjorth

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Re: Wedgewood Partners on selling their BRK stake
« Reply #10 on: October 13, 2019, 09:20:06 AM »
This is a great take on the whole market price situation for Berkshire over time, wabuffo,

Thank you for sharing.
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Munger_Disciple

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Re: Wedgewood Partners on selling their BRK stake
« Reply #11 on: October 13, 2019, 11:51:16 AM »
Based on my calculations Berkshire stock price roughly matched the S&P 500 index over a 10-15 year holding period (end date being 10/11/19). For a saver in taxable account, Berkshire is still a better holding than the index because no dividend taxes are payable. Thus Berkshire is a tax efficient alternative to the index. While Berkshire could outperform the index say in the next 5 years if there is "turbulence", very long term results are likely to match the index going forward.
« Last Edit: October 13, 2019, 11:56:01 AM by Munger_Disciple »

CorpRaider

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Re: Wedgewood Partners on selling their BRK stake
« Reply #12 on: October 13, 2019, 01:04:53 PM »
"extant"....<click>.

LongTermView

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Re: Wedgewood Partners on selling their BRK stake
« Reply #13 on: October 13, 2019, 02:27:30 PM »
Complaining about Berkshire not buying Microsoft is pretty silly considering that Buffett's made it very clear why he didn't do so. Considering his close relationship with Gates, Buffett doesn't want anyone to get the perception of any improprieties like insider trading.
I agree the part about Microsoft was pretty silly.

maxthetrade

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Re: Wedgewood Partners on selling their BRK stake
« Reply #14 on: October 13, 2019, 03:05:15 PM »
Complaining about Berkshire not buying Microsoft is pretty silly considering that Buffett's made it very clear why he didn't do so. Considering his close relationship with Gates, Buffett doesn't want anyone to get the perception of any improprieties like insider trading.
I agree the part about Microsoft was pretty silly.

Well, I like Rolfe and I think Wedgewood is one of the better active managed shops out there but I have to agree that the comments about Buffett not buying MSFT is a low point and pretty disappointing. Buffett said several times publicly that he won't buy MSFT because people would assume he has insider knowledge. Most people wouldn't care but Buffett has his own standards and they are above almost anyone I can think of (including my own ;-))
BTW, I bought a ton of MSFT leaps early in 09 only to sell after a quick 50% gain in the stock, I missed the subsequent quadruplicaton of the stock, too damned bad ;-)

Gregmal

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Re: Wedgewood Partners on selling their BRK stake
« Reply #15 on: October 13, 2019, 04:31:38 PM »
Are people really OK with writing off Warren missing super obvious investments simply because "he didn't want people to think" this or that? Who cares what people think? People can correctly or incorrectly think whatever they want that has zero to do with his responsibility and duties to shareholders....

Frankly I dont even think it is that, regardless of what he says. I mean what about Costco?? His best bud has long owned it and its something that at his sharpest, was right in the wheelhouse. Whats the excuse there?

I mean, I've been reading these threads for a while and the degree to which people are giving passes here is outrageous. Even back with the "oh he's not being more aggressive with the buybacks because he wants to give every single last shareholder a perfect warning and doesn't want to take advantage of anybody..blah, blah, blah" nonsense. Where does it end? How is it not completely unacceptable for somebody with a fiduciary responsibility to continuously make excuses for crossing off more and more investment opportunities when by both his own admission, and the observations of any rational person, he's already significantly limited by size in terms of what he can invest in, in the first place? I dont think I'd have a single investor if I said, I'm automatically not really able to buy 90% of companies out there, and oh guess what, because of my moral perception cross off 2% more, and then because I am worried about what people think of me I'll eliminate another 5%. 

Mephistopheles

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Re: Wedgewood Partners on selling their BRK stake
« Reply #16 on: October 13, 2019, 04:46:15 PM »
I agree Gregmal regarding MSFT.

I've always thought that the reason he never bought MSFT was because he didn't think it had a durable competitive advantage, but in order to not offend his friend Bill he gives this excuse.

I don't believe that the shrewdest investor of all time would pass up on an opportunity for such a stupid reason.

Spekulatius

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Re: Wedgewood Partners on selling their BRK stake
« Reply #17 on: October 13, 2019, 05:03:15 PM »
1)  Warren lost his edge in public markets in the late 90ís and I think he knows it too. He still has an edge in private deals. 
2) He has become a closet market timer. This has to do with 1). Thatís why most of his cash deployments will be in some sort of market dislocation, when there are pitches that are obvious to him.
3) Itís still a much better situation than FRFHF, where they lost their edge investing, but donít acknowledge it.
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chrispy

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Re: Wedgewood Partners on selling their BRK stake
« Reply #18 on: October 13, 2019, 06:17:32 PM »
Berkshire invested in AMZN and JPM. I do not hear any concerns about insider trading. What is so much different about MSFT?

RichardGibbons

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Re: Wedgewood Partners on selling their BRK stake
« Reply #19 on: October 13, 2019, 11:19:19 PM »
I agree Gregmal regarding MSFT.

I've always thought that the reason he never bought MSFT was because he didn't think it had a durable competitive advantage, but in order to not offend his friend Bill he gives this excuse.

I don't believe that the shrewdest investor of all time would pass up on an opportunity for such a stupid reason.

Yeah, I think that some people care a fair amount about integrity and other people don't at all and will do what they can get away with. What's more, I think it's hard for both types of people to believe in their hearts that the other side truly exists. (You can see this in the comments here: "I don't believe that the shrewdest investor of all time would pass up on an opportunity for such a stupid reason." Similarly, I have a hard time believing anyone would even consider selling their integrity when they have literally no need for the money.)

As for the argument "who cares what people think--it doesn't have anything to do with responsibilities to people and shareholders", I find the argument pretty weak.

First, Buffett isn't Berkshire shareholders' bitch. He has no responsibility to destroy his own reputation--or compromise his integrity--to make money for shareholders. To me, this point is sufficient to refute the argument.

Second, displaying a lack of integrity could hurt his business. One reason people sell private companies to Buffett is because they believe he'll act with integrity in his dealings. Not everyone's trying to maximize their own profit, particularly when they're thinking more about their own legacy and the outcome for their company and it's employees.  If Buffett were viewed as someone lacking integrity, some people might decide not to sell to him the company they've spent decades building. That would hurt Berkshire.

(Chrispy, the difference with Microsoft is that Buffett is good friends with Gates, but not good friends with Bezos or Dimon.)