MarkGillCPA

Berkshire Hathaway Stock Portfolio: At Risk of Resembling an Index Fund?

BRK is not so much an index fund as it is a closed-end fund. Going forward, I will analyze BRK by looking at its NAV relative to the price of the stock. If it's selling at a discount ot NAV, it's a buy. If is selling at a premium, it's a sell. BRK actually trades at either a high premium or low premium, but it's the same point. I suspect this NAV premium will decay over time, especially if something happens to Mr. Buffett. I know of at least one hedge fund manager who has been trading BRK using this concept over the last year with some success. Berkshire is slowly becoming Tri-Continental (TY), a closed-end fund that invests in blue chip stocks

Berkshire Hathaway: Proof That the CDS Market Is Irrational

IMHO, CDS contracts do more harm than good and should be eliminated from the financial world.

Mr. Lanthrop, hedge funds are not buying CDSs to hedge against bond portfolios. They buy them at the same time they are shorting common. They do this to incite fear in the markets. Last I checked market manipulation was supposed to be illegal. If the SEC was doing its job, these things would have been made illegal over a year ago.

I have no problem allowing anyone to short a stock. An argument against CDSs is not an argument against shorting. But we cannot allow someone to link a short position with a CDS to manipulate markets.

We need to get our financial markets back to the basics of buying and selling stocks and bonds. Its the derivatives that are destroying us.

Buffett's Latest Headache: U.S. Bancorp

williemo,

I'm not familiar with Bespoke either, other than I notice that they publish a lot of articles. Some of them are very good, and some, like this one, are a little below par. Putting out lots of articles appears to be a part of their marketing program. Nothing wrong with that. Hopefully, critical comments on the poor articles will encourage more of the good ones. I would expect the same treatment.


On Jan 21 07:57 PM williemo wrote:

> To : Daniel B
> I would think twice before I made a piercing comment like you did
> about the authors of the article. You obviously aren't familiar with
> Bespoke.

Buffett's Latest Headache: U.S. Bancorp

So what's the point of this article? To inform us that stocks are down? Are you saying these stocks are sells because they are down? Or, are they buys?

The only fundamental statement Bespoke makes is that USB Q4 EPS is down 65%, and that's due to the large loan loss provision. After reviewing the earnings report, it appears they (USB) are being realistic with their provision. Deposits were up, loans were up, and net interest income was up 23%. I suspect there is still a quarter or 2 of big provisions, but when those level off, earnings will take off.

Also, I suspect there will be further cleaning up to do with respect to Downey and PFF acquisitions, and I would not be suprised to see the dividend cut. So I don't think I'm being pollyannish about USBs prospects.

However, I'm kicking my self for not loading up the boat when the stock briefly traded below $12, and may do so anyway if it pulls back to $14. Did you notice that buyers went wild when this stock hit 12? At that price, who cares what it does over the next 3 to 6 months. If I can buy this at 14, I have no doubt that sometime over the next 3 years that it will be trading at 28 or higher.

I agree with ArtfulDodger above. I've seen too many stocks round trip to be a buy and hold forever investor. But I am a value investor and I think Mr. Market is offering us an opportunity.