sr9web

The 15 Most Cash Rich Companies

Your comments are intriguing and merit further inquiry...


On Mar 15 08:07 AM Did U Think The Ponzi Scheme Would Last? wrote:

> Go look at TM's debt and tell me it is a healthy company in a deflationary
> crash. TM will trade like GM soon. They did not earn their manufacturing
> capacity, they borrowed it from the bank. Debt will get harder and
> harder to come by as auto sales settle in at a fraction of what they
> did over the decade 1995-2005. Toyota is one of the best shorts out
> there because people don't understand how much crushing debt they
> have - over 120 billion worth - as we enter the jaws of the greatest
> economic bust in the history of man.
>
> Only companies with low debt and high cash and which downsize aggressively
> early on are going to be well positioned for this crash.

Jeff Matthews on Berkshire's Equity Portfolio

Don't you mean WFC?

Berkshire Testing November Lows - Already Down 17% YTD

A rare, unusual event - eg: most swans are white, so black ones are rare and unexpected


On Feb 19 11:12 AM campo wrote:

> Explain "Black Swan"

Lessons from the Madoff Scandal: Deciding Which Funds Are Worth an Investment

Excellent chart - thanks

Let Warren Buffett Handle Your Portfolio

Buffett is a greedy wanker.

When he buys stocks, he insists on getting good yield via juicy dividends.

But Berkshire stock pays ZERO dividends.

Buffett's Gamble: $40 Billion Bet on Volatility

Oops!

Transposed seller/buyer in a few places...


On Nov 23 03:01 PM sr9web wrote:

> My word, is everybody insane?
>
> The buyer of the index puts (the party/parties who paid the $4.5B
> to Buffett) did so for the simple reason that they needed to maintain
> net worth covenants during this downturn. It's all a big accounting
> fiction and it's a close to a sure thing win for Berkshire as you
> can get.
>
> As the market tanks, the puts rise in value. This allows the seller
> to artificially mark up his books (by some accounts, $18B so far).
>
>
> Now, is the seller really ahead by $18B...? No!
>
> And why not? Because those puts cannot be exercized until way in
> the future. Any gain that's there is not currently realizable. <br/>
>
> So why do it?
>
> The seller gets a mechanism by which his books can show a gain and
> thereby not show a net drop off in total worth as the market crashes.
> And Buffett gets $4.5B with which he can buy preferred securities
> that yield in excess of the return he needs to pay the puts - if
> he must pay the full amount.
>
> Do the math - the compounding that Buffett has already locked in
> with the GS and GE preferreds puts him 100% safe regarding his future
> obligations on these puts.
>
> So who bought the puts? My guess is a wealthy family that has a large
> controlling interest in a major corporation. Likely, there are some
> substantial borrowings which have net worth covenants and therefore,
> these puts will let them ride things out safely because these rise
> when the market fallls.
>
> In the end, the buyer will keep control of their current status and
> it will have cost Buffett nothing for letting them lean on him for
> an extended period of time.
>
> Anyone who thinks Berkshire is losing out here is stupid.

Buffett's Gamble: $40 Billion Bet on Volatility

My word, is everybody insane?

The buyer of the index puts (the party/parties who paid the $4.5B to Buffett) did so for the simple reason that they needed to maintain net worth covenants during this downturn. It's all a big accounting fiction and it's a close to a sure thing win for Berkshire as you can get.

As the market tanks, the puts rise in value. This allows the seller to artificially mark up his books (by some accounts, $18B so far).

Now, is the seller really ahead by $18B...? No!

And why not? Because those puts cannot be exercized until way in the future. Any gain that's there is not currently realizable.

So why do it?

The seller gets a mechanism by which his books can show a gain and thereby not show a net drop off in total worth as the market crashes. And Buffett gets $4.5B with which he can buy preferred securities that yield in excess of the return he needs to pay the puts - if he must pay the full amount.

Do the math - the compounding that Buffett has already locked in with the GS and GE preferreds puts him 100% safe regarding his future obligations on these puts.

So who bought the puts? My guess is a wealthy family that has a large controlling interest in a major corporation. Likely, there are some substantial borrowings which have net worth covenants and therefore, these puts will let them ride things out safely because these rise when the market fallls.

In the end, the buyer will keep control of their current status and it will have cost Buffett nothing for letting them lean on him for an extended period of time.

Anyone who thinks Berkshire is losing out here is stupid.

Warren Buffet, The Ultimate Dividend Investor

Typical Buffet - he want dividends for himself, but he doesn't pay any.

Anything Buffet says in the media is expected to be self-serving.-

Big Money Managers Are Cautiously Bullish - Barron's

This article smells like a pump.

Seth Klarman, Meryl Witmer and Marty Whitman - Q2 2008 Portfolio Moves

Thanks for the info. Where do you get this data?