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  • Exxon Mobil: The Dividend Growth Picture Looks Unusually Bright [View article]
    Yes. I'm a fundie too (albeit not from an energy background) but am well aware that XOM's statements are often the defining word on the state of the energy union. No one has better researchers or engineers or boots on the ground. XOM's "moat" simply is their expertise in vertical systems integration. Hard, hard hard to beat, and they have a decades-long running start. A 30-year investment, for sure.
    Mar 11, 2014. 10:26 PM | 2 Likes Like |Link to Comment
  • Berkshire Hathaway's Pieces Are Worth More Than The Whole [View article]
    You're talking out of your tookas here, because there are life insurance companies like NWLI selling at **steep** discounts to BV, and essentially the entire P&C industry as well as several top flight reinsurers like Everest and Zurich selling at or close to or below book value.

    STOP SAYING THINGS JUST TO SAY THEM please. It's insulting.
    Mar 11, 2014. 07:59 PM | Likes Like |Link to Comment
  • Berkshire Hathaway's Pieces Are Worth More Than The Whole [View article]
    Furthermore, yes. Berkshire as a conglomerate is indeed worth less than the sum of its parts. This has been so with nearly every conglomerate barring the conglomerate boom of the '60s and the Tyco/Enron bubble years.

    I'd be surprised if Berkshire was worth less than 1.5x its accumulated parts, and is probably worth much, much more when considering the fact that some of Warren's acquisitions are now several decades old and were likely amortized off the books when the author was in grade school. This is a negative why?

    There have been other Berkshire-negative articles recently, notably by Larry Swedroe. Difference between Larry's work and this is that Larry knows what he's talking about; I just happen to think he's wrong, but I know and respect his professional work, and his opinions are his own. The present author doesn't seem to be able to practice fundamental analysis on any sort of capable level and should probably just stick to VFINX instead of destroying the wealth of himself and perhaps others in any fiduciary capacity he may find himself in.

    I also challenge him to produce his audited 10-year returns; something I've never done on this site and probably never will again, but the level of just sheer wrong-headedness in this article worries me that he may indeed have fiduciaries and if so should probably not be practicing.

    Like, if you don't understand book value per share and how it relates to an insurance stock............
    Mar 11, 2014. 09:21 AM | 8 Likes Like |Link to Comment
  • Introducing The $100K Young Professionals Portfolio [View article]
    haha savage comments thread up in here
    Mar 11, 2014. 08:33 AM | Likes Like |Link to Comment
  • Exxon Mobil: The Dividend Growth Picture Looks Unusually Bright [View article]
    Exxon Mobil is the best of its breed, operationally the most Rockefeller-like of the old Standard Oil firms. Buy Chevron if you just want a bigger dividend right now, BP or RDS if you want to try to buy a dollar for seventy-five cents, but XOM is the best-run energy company on the planet, has been for decades, and I have no problem saying that. Anyone who already is invested in KO or BRK should be familiar with the concept of paying a slight premium for superior quality.

    A good recent book about XOM (though there are several) is Steve Coll's "Private Empire: Exxon Mobil and American Power." Somewhat slanted, but still very well-researched, and you come away marveling at just how efficient this massive operation is. They work on a timeline similar to the Vatican: not for today, but for decades from now.
    Mar 11, 2014. 08:19 AM | 9 Likes Like |Link to Comment
  • Berkshire Hathaway's Pieces Are Worth More Than The Whole [View article]
    "Personally I can't for the life of me figure out why anyone would use (growth in book value) as a measure of success"

    because brk's primary business is insurance, and book value is a good measuring stick for insurance and financial companies. brk's selling at a premium to most insurance and reinsurance companies right now, and there are many fine insurance companies which are selling at or below book. i don't think you really understand what you're writing about here, and you don't understand berkshire; please stop.
    Mar 11, 2014. 07:52 AM | 10 Likes Like |Link to Comment
  • Warren Buffett's 2013 Annual Shareholder Letter: Another Classic [View article]
    "You don't need to figure out the next trend in biotechnology to have solid long-term returns while receiving a rising income source in the meanwhile."

    AMEN!
    Mar 9, 2014. 11:06 AM | Likes Like |Link to Comment
  • Are Demographics Really Destiny? [View article]
    Good read, sensible & informed argument, thanks for it. The difficulty lies not in growth numbers, but in assigning something like a ROIC amid shifting dynamics such as investors in EMs are presented with. Returns are altered by many variables, besides raw demographics, and not everything is a "known known."
    Mar 6, 2014. 07:56 AM | Likes Like |Link to Comment
  • Warren Buffett's Politically Incorrect Investments Underperformed The S&P 500 Over The Past 5 Years [View article]
    *The one period he did well... except for the preceding decades in which he compounded Berkshire's book value by roughly 20% per annum?

    *Operating during a parabolic market move isn't a "trade," it's a series of decisions and attitudes. Value investors regularly underperform during overheated markets and "miss out" on today's hot story stocks. We'll see you on the flipside.

    * He outperformed S&P by 15% in 2008.

    Peter Lynch has written in his best-selling book "One Up On Wall Street" that he considers Buffett the greatest of all investors, and I'm certainly willing to consider Mr. Lynch's opinion before I consider yours.

    I hope you only invest/trade with your own money.
    Mar 5, 2014. 08:19 AM | 1 Like Like |Link to Comment
  • Warren Buffett's Politically Incorrect Investments Underperformed The S&P 500 Over The Past 5 Years [View article]
    I remember this same flavor of nonsense coming out during the dotcom bubble era.

    Berkshire underperforming11!!!1 Buffett's lost it! Can't keep up with high-flying superstocks of tomorrow!!1! Doesn't remogrify Sortino nu ratio ultramagnetic 0.3243297 alpha projecting class correlation!!!

    Get back to me when the index drops 30% and Berkshire doesn't.
    Mar 5, 2014. 03:51 AM | 3 Likes Like |Link to Comment
  • The Dhandho Of Berkshire Hathaway: Why It Just Might Be A Good Partial Substitute For An Index Fund [View article]
    I feel like that was a way to guard against any hazards of mismanagement BRK might be prone to in the future, without explicitly stating so. The Sokol incident may have led to the decision. It's unlikely BRK will be mismanaged by his successor... but it's even less likely that VFINX (which if I'm not mistaken was his choice in the decision) will be mismanaged. Graham, after all, suggested something very much like an index for his "defensive investor," along with a mixture of Treasury bonds. So it's more or less in keeping with Buffett's tendencies methinks.
    Mar 2, 2014. 03:55 PM | 1 Like Like |Link to Comment
  • The Dhandho Of Berkshire Hathaway: Why It Just Might Be A Good Partial Substitute For An Index Fund [View article]
    Fwiw I plugged the same into Scottrade's chart. The 10-year numbers still favor Berkshire, but not by as decisive a margin. Scottrade doesn't offer a 15-year view, but they do offer a 20-year and the comparison there is *very* decisive in favor of Berkshire, at a margin of about 3.5-to-1. With the 10-year, the chart favors what I was saying; Berkshire underperforms in rising markets, and outperforms during bear markets. None of this is to say that Dimension runs bad funds or that Mr. Swedroe is a bad guy or is cooking the numbers, only that I think Berkshire will do better top-to-trough than the indices or even most value funds will, and that that's a point I haven't seen Larry address.

    Now, what would be interesting is to see Larry take the designated "bear" position at this year's Omaha meeting. I don't think he's crazy enough to stake out a short position in Berkshire, which is what they seem to require - you'd have to be full-moon loony or have some Nostradamus-like precognition of impending doom to do so - but his articles here have been thoughtful and well-reasoned, and it would make for excellent back-and-forth.
    Mar 2, 2014. 01:44 PM | Likes Like |Link to Comment
  • The Dhandho Of Berkshire Hathaway: Why It Just Might Be A Good Partial Substitute For An Index Fund [View article]
    Yeah, you know? I did forget the dividend. But I think the div for DFL is something like 1.5% right now, which after expenses is around one and a quarter. It's a meaningful difference compounded, but probably not a game-changer.

    But, also, another point to make is that Berkshire and the S+P, I've always thought, is something of an apples-to-oranges comparison. Berk is a grip of Fortune 500 companies mish-mashed with insurance and reinsurance and a plethora of relatively obscure companies like H.H. Brown and Jordan's Furniture. It might be that the VTI would be a better (and somewhat more demanding) comparison, but Berkshire is its own animal and there's probably no perfect benchmark against its book value growth.
    Mar 2, 2014. 12:30 PM | Likes Like |Link to Comment
  • The Dhandho Of Berkshire Hathaway: Why It Just Might Be A Good Partial Substitute For An Index Fund [View article]
    Go onto Yahoo! Finance and play around with the interactive chart. You'll see what I'm talking about; you can compare the two directly using the "compare" tab if you're not familiar with the Yahoo charty thingy. On 2/22/99, DFLVX's ticker price was $19.62, while BRK.B's was $47.58. Today's prices are DFLVX $31.39, while BRK.B's is $115.78. The ten-year numbers are similar. I'm not actually sure where Larry got the numbers for this claim, so I'd like to see a little clarification when he makes his grand entrance.
    Mar 2, 2014. 12:21 PM | Likes Like |Link to Comment
  • The Dhandho Of Berkshire Hathaway: Why It Just Might Be A Good Partial Substitute For An Index Fund [View article]
    Berkshire has doubled DFLVX's return since March 1999.
    Mar 2, 2014. 12:08 PM | Likes Like |Link to Comment
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