FIG trader_

MBIA and Ambac: Edge of the Cliff, Ratings-Wise

Oldlures1; wake up. do you actually think the "headlines" caused the failure. If you are still holding the bag, it will be empty soon. Only the last phase of the decimation for equity holders is probably due to "headlines". The business model is worthless, and William Ackman deserves star status for exposing the "investment farce". All the rest of your discussion, and that of 99% of commentators is worthless filler.

Why Kass Is Wrong About Berkshire Hathaway

He is specifically is quoted as saying it is the performance of the four stocks as well as other things. Is he referring to the credit default swap which are under water by 1.5 Billion? Big F'n deal. WEB hasn't taken a multi-billion loss ever, except for catastrophe losses. I wouldn't lose sleep over a markdown on a credit he has studied. Or the index put sold at par. A 15/20 year bet. Fuggedaboutit. Kass will be 6 feet under as will WEB, but the cash will be compounding

Is Berkshire Hathaway Now a Bargain?

Well, after trouncing his peers (all financials, GE, whomever) in 2006/2007, the geniuses claim to know what "fair value" is on this stock. An even more ludicrous proposition, given the close to $20 billion put to work in acquisitions in the last twelve months or so. A 1 billion plus temporary write down of a credit derivative?? peanuts relative to capital base, and the 10's of billions written off by peers. Given that it is a credit bet, I know where I would put my money. This is a damn cottage industry. One can look at the % declines over the last twenty years, and see how many times it was 20% or greater, and how many years it took to get back to breakeven (in the stock price). Only once was the decline greater (80k to 40K approximately). This is the last time, an institutional money manager has the chance to actually capture real value here buying today taking advantage of "market dislocation" (flight to quality exiting) and seeing todays acquisitions flourish in the next five years to ten years before he croaks. The large institutions that haven't owned the stock should be embarrassed not having owned this for the last five years. Doug Kass has probably covered already

Berkshire Hathaway Appears Undervalued

great, all your numbers suggesting its NPV or intrinsic value are 140 to 180K are as well thought through as is the suggestion that hedge funds will through as the analysis of hedge funds trying to break this up to break it up. When in 2050? Lets see, dozens of family run companies have jumped through hoops to get Buffett to buy their company, and somehow, the board (stuffed with Buffetts friends family and loyalists), are going going to let a few vultures pick a way at it, when they don;t want to be sold to somebody else, and the owners themselves are quite happy where they

Comparison to Berkshire Hathaway Shows Sears Has Hope

If by imagination you mean that anyone with decent track record in early years can be compared with Buffett, than by golly, add any of 1000 PM's or private equity managers to your analysis. Good luck. I guess you can claim credit for having imagination, and waste your time. I will be happy to not be part of that club of imaginative types. The presumption is that Lampert (or any of 1000 others) has either the ability or inclination to buy insurance assets, and run the business properly. For those in the know, there are companies that could potentially be in that circle of champions. LUK, MKL, FFH in ten or twenty years; some insurers, some not. The non-insurers have no float to invest but great investment track records; the insurers have great track records, but few non financial assets. MKL in particular is viewed as a potential peer, and has some 20 years track record, with no non financial assets to support investment (BV) growth. Tom Gaynor, the manager, has done remarkable thing from small base. How is SHLD, anything comparable again????

Comparison to Berkshire Hathaway Shows Sears Has Hope

You still miss the point, and misunderstand Buffett and methods available to him; While I have no opinion on Ed Lampert or SHLD, BRKA, and its earlier years had insurance operations (besides just stock holdings in GEICO; 50% pre acquisition) with available float for investing. Its the earlier stock performance that gave him capital available to continue investing; Free cash from any operations, as good as it may be can't drive the kind of performance that GEICO, especially in mature business. Likewise; SHLD, if it is growing fast, it would more than likely be reinvesting Capex in expansion; Where is capital available for building huge private equity portfolio; Sorry, you have to go back and learn the basics of Buffettology

Comparison to Berkshire Hathaway Shows Sears Has Hope

I don't get it. What do two personalities and two "stock performances" have to do with two companies that are as different as night and day? BRKA is a portfolio of companies and investable "float" form insurance. SHLD is a retailer, with some RealEstate assets? Tell me I missed something.

Berkshire Supporters and Buffett Himself Reinforce My Point

I enter this debate with trepidation, but after weeks of pestering by Todd, I will respond. Todd, as you ought to know, Mr. Buffet is approaching 80 years old. His life expectancy is now probably about 7 more years, assuming his doc is telling the truth. Who is going to give him any credit for any modest incremental positive performance in (say) 10 years when he is no longer here? He has nothing to gain except for applause from the cheap seats, but a whole life of investment success to put at risk. What $20 to 40 billion dollar investment were you recommending again?????

Why Volatility and Beta Matter

You seem to be looking for data to fit the theory. Price data used to calculate beta (Bloomberg data for example) goes back only five years. Turnover of average portfolio is probably somewhere between 3 and 5, probably materially lower for high beta tech and growth portfolios. Buffett's holding periods is minimum decade, in most cases substantially more (major holdings AXP, KO, WFC,). I can't imagine what assumptions you use to get his portfolio to fit your model. It makes no sense. Sure volatility and beta matter..............., especially for young turks and masters of Universe types, 2 and 20 crowd who play that game for that bonus every quarter, and sell it to the even more ignorant pension funds. But as history and WEB proves (and you don't); long term consistent returns (on capital and equity) will produce better results. The voting and weighing machine analogy is most appropriate here

Berkshire Hathaway's Valuation: Credit Suisse or Common Sense?

Somebody has to start screening this stuff; You can't keep on allowing ignornace about finance, accounting and stock valuations to be disseminated so easily. Do you know where the $80636 in Berkshire investments (as per your commentary) came from and what purpose they servce?????? They are backing up a considerable amount of insurance liabilities (you look up the exact number) the difference being some number close to shareholder equity (minus the equity in other businesses). It can't all be distributed and much is under insurance subsidiaries; the capital ion those books is called statutory capital, levels of which are regulated and controlled by state regulators; You guys are dangerous to your own financial health if you proceed on current path

Berkshire Hathaway: Hold Off Until Buffett Steps Down

As of the last few years, there is only one thing more important to WEB than exceeding market returns. That is not losing any significant amount of money in any one investment. After the "mistakes of General Re" and underdiversifiaction internationally, and perhaps some arrogance in not recognizing some orther global trends, he has repeatedly given his mea culpa. That said, he is setting the stage for the next ten years, not aggressively buying in at the top, but buying enough to keep his asset allocation rather constant, but still conservative. Those clamoring for more deployemnt of cash, and by inference, assuming that is the reason for underperformance are somewhat disingenuous. That view assumes (today) there are investments (private or public) that can yield more than cash over the next ten years, but fail to explain why that is the case. Does the fact that leverage kings keep on buying prove the author right; Not necessarily. In fact, the added risk layered on is increasingly likely to cause an accident; a pileup WEB doesn;t want to be involved in. Only time will tell, but those arguing in favor of more aggressiveness haven't come up with very convincing alternative explanations as to why returns for the next ten/15 years will be much higher than cash + a few hundred beeps

American Express: Watch the Dividend

You misunderstand Buffett and value investing, especially in regards to financials. In order to even make AXP's "dvd'd yield comparable with other "value" stocks, you would have to examine the past growth in the divdend as well as the total return (and/or capital appreciation) of AXP versus peers. There are plenty of stocks with 4% dvd's (most banks) that have not showed any where near the kind of appreciation experienced by AXP. Does that make them better value stocks????? (In fact, dvd is a small part of Total return for AXP) The reality is dividend payout ratios has more to do with capital management than anything else. If you really want to measure business performance, you would be better off looking at after tax ROE or return on total capital over many years. AXP has (pro forma for spinoff of AMP) ROE's in the 30%, probably double the average bank over the last ten years. Regardless of whether it pays 1% or 3% dvd, true measure will be the direction of (or sustainbility of the current level of its ROE). For what its worth, I don;t think it is sustainble and the stock is very richly priced. Cheers

Foreign Investing and Diversification Lessons From Berkshire Hathaway

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Foreign Investing and Diversification Lessons From Berkshire Hathaway

Since the claim is that he is/was the greatest asset allocator ( and I agree its true up until late Nineties), it should be fair to look back and examine why he underperformed (relative to broader measures for markets and earnings). I'm not trying to pick on him, just setting the record stright since often his record goes unexamined (or poorly examined). To end the discussion I'll use his terms to examine his "core holding" $ base assets and focus on "margin of safety". By all measures, there was little margin of safety for the dollar in the late Nineties, as repeated ad nauseum by the # 1 economist Stephen Roach (and aware to any one else that opened their eyes). It is almsot 50% down from highs (versus euro, we are really not referring to emerging markets at all as you suggest), and as he himself admits now, seems in trouble (longer term) unless something is done to drastically reduce twin deficits. Why he didn't act sooner can only be answered by him.

Foreign Investing and Diversification Lessons From Berkshire Hathaway

I won't argue whether he does/did (and will do) a good (in fact great job), but only the point of diversification (and non $ earnings sources). By currency, the $ is overrepresented substantially relative to the US economy's representation globally. Even if one assumes he is "talking" to US based shareholders who save, spend, invest in $. For the most part BRKA investors (mostly wealthy individuals and institutions who don't ever selll the stock) would have benefited more in the last ten years by a more diversified earninngs and balance sheet. Cheers