Seeking Alpha

Nat Stewart  

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  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    Berkshire has more than doubled the market's return since this article was published - indeed it almost seemed to be the starting gun that launched Berkshire out of the gates. Talk about bad timing.
    Dec 5, 2014. 10:12 AM | 3 Likes Like |Link to Comment
  • Buffett's Brilliant Duracell Deal: A Reprise Of Past Deals, A Comment On The Present Market, A Whisper About The Future [View article]
    He wants more cash flow. Duracell, as a directly owned company will be able to return cash to him without double taxation. I am sure he will dividend cash up to Berkshire at a rate much higher than PG's easily after tax dividend.
    Nov 14, 2014. 10:04 PM | 3 Likes Like |Link to Comment
  • Don't Judge Berkshire Hathaway By Its Book Value Cover [View article]
    "On a risk adjusted basis, Warren has destroyed investor value."

    As others have noted, this article is so full of inaccuracies and misconstrued opinions that it is almost not worth responding to.

    However, I will debunk the above statement. BRK.A has the highest sharpe ratio of any stock or mutual fund over the past 30 years. The very highest, not just one of the best. And this is based on stock price returns, not book value. In other words the author makes a declarative statement and is not just "kinda" wrong, but is 100%, dead wrong, as wrong as one could possibly be. And this is very typical of the rest of the article.

    Anyone who wants a real understanding of Buffett's massive risk-adjusted outperformance should read the following academic paper (PDF):

    http://goo.gl/Kv9kKY
    Mar 12, 2014. 03:31 PM | 6 Likes Like |Link to Comment
  • Why I Never Want Berkshire To Pay A Dividend [View article]
    Great Job on your first article!
    Feb 13, 2014. 10:53 AM | Likes Like |Link to Comment
  • Why I Never Want Berkshire To Pay A Dividend [View article]
    Am I the only one who feels like they have read this article several times before? Must be dé·jà vu.
    Feb 12, 2014. 07:36 PM | 1 Like Like |Link to Comment
  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    Any investor who wants to track portfolio performance the way Larry suggests here (against benchmarks, risk measures, etc) and receive free, very detailed and sophisticated portfolio reporting (return attribution, etc) should strongly consider opening an account at Interactive Brokers.

    Their portfolio analysis tools are awesome, and make it easy to have real accountability with your results. For anyone who makes use of leverage it is also the best brokerage in terms of margin rates. I can borrow at institutional (libor +) rates which I have never seen at any other brokerage that takes retail clients. One of the best credit ratings too.
    Jan 23, 2014. 07:15 AM | Likes Like |Link to Comment
  • Berkshire Hathaway: Shooting Dead Fish In A Drained Barrel [View article]
    "VIX, namely VXX, when the market is at all-time highs. The VXX"

    Ouch. I urge you to reconsider this strategy - VIX products are horrendous hedging tools with massive economic carrying costs. I have a seeking alpha article on the products here: http://seekingalpha.co...
    Jan 18, 2014. 12:42 PM | Likes Like |Link to Comment
  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    Great answer Larry. Much appreciated.
    Jan 15, 2014. 05:45 PM | Likes Like |Link to Comment
  • Why Bother Diversifying, Just Buy Berkshire Hathaway [View article]
    Yes, but are 5, 10, and 15 year rankings useful prospectively for making investment choices in the present moment?

    The fact that one asset or asset class has been recently outperforming might not say all that much about future relative returns.
    If it is being proposed that it does, that hypothesis should be stated plainly and evaluated as such.
    Jan 15, 2014. 01:36 PM | Likes Like |Link to Comment
  • Should Berkshire Hathaway Finally Pay A Dividend? [View article]
    The estate tax is the operating financial capitalist's best friend, unfortunately. It is also heavily lobbied for by the insurance industry.

    It is what causes many closely held and family owned businesses to end up selling out to private equity firms and the like. It works to redistribute ownership from operating businessmen to financial capitalist and large corporations.
    Jan 13, 2014. 09:48 PM | Likes Like |Link to Comment
  • The 2 Real Threats To The Future Of Berkshire Hathaway (And Its Defense Against Them) [View article]
    It was not just that. It was that the contracts did not require additional margin or collateral - in other words no potential for a margin call. Found this article that explains my point http://read.bi/1k5q0Xn
    Dec 31, 2013. 05:58 PM | Likes Like |Link to Comment
  • The 2 Real Threats To The Future Of Berkshire Hathaway (And Its Defense Against Them) [View article]
    Buffett did something very smart with his derivatives positions. He wrote the contracts so that they only required settlement at the end of the term, with no intra-period margin or collateral calls possible. This is why in spite of these contracts, he was not badly hurt during 2008 (without this stipulation, I doubt he could have made his opportunistic investments during that time) My understanding is that new financial regs now ban this type of deal, so it is unlikely (unless I have missed something) that Buffett will be writing more such contracts.
    Dec 31, 2013. 04:53 PM | 1 Like Like |Link to Comment
  • If I Could Buy Just One Stock, It Would Be This One [View article]
    It is a strategy that works for people far wealthier than what you are talking about.
    Jun 15, 2013. 07:35 PM | Likes Like |Link to Comment
  • The Secret Of Warren Buffett's Alpha [View article]
    Cranky, does that include dividends? It might be interesting to see what the market cap of RY was at the start of the period you are measuring.
    Jan 8, 2013. 08:11 AM | Likes Like |Link to Comment
  • The Secret Of Warren Buffett's Alpha [View article]
    I just noticed your use of the Average True Range indicator for the screen. I think this is a very useful indicator for trading, however I think there is an issue with the way it is used here and it might not be doing what you intend it to do.

    The problem is that for the indicator to capture volatility accurately in this context, it needs to be relative to the stock's dollar price.

    For example a 10 dollar stock with a .75 ATR is much more volatile in real terms than a 100 dollar stock with a .75 ATR. This is going to bias your list towards lower dollar priced stocks, not necessarily lower volatility stocks.

    For example more than 50% of your stocks are under $20 and none are greater than about $56. If your reverse the sign on the ATR measure, all are over $20 and the highest price is almost $170.

    For your purpose it would be nice if the finviz screen had something like "ATR/price" or "ATR/average price"
    Jan 7, 2013. 02:49 PM | 5 Likes Like |Link to Comment
More on BRK.A by Nat Stewart
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