He didn’t listen to Buffett

He did the opposite. See what happens.

Warren Buffett advised investors to be fearful when others are greedy and greedy when others are fearful. SoftBank Group’s Masayoshi Son is doing the exact opposite. Son and his largely ethnic Indian dealmakers spent big when tech valuations were super hot and then went quiet as prices slumped. Its Vision Funds invested just US$300mn in two companies, compared to US$9.6bn during the same quarter in 2021.

Son is personally liable for more than U$5 billion on side deals as the funds losses mount.

He “borrowed” $ from the funds to fund his personal investments into the funds. That’s Mamas’ and Son’s idea of financial engineering.

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Buffett sayings

A now ex-Tai Tai (she now poor) because she disagreed with these tenets. She can conduct a masterclass on how to to marry an elderly ATM machine and end up poor. How tai tai got poor: Tai tai forgot this amd Tai tai keeps losing money

British Buffett: From hero to zero

Apposite to Buffett trumps S&P again after having lost his way for years, is Terry Smith.

He’s another value investor like Buffett and has sometimes been described as the British Warren Buffett. His investment policy is “buy good companies, don’t overpay, do nothing”. “Do nothing” refers to minimising portfolio turnover to keep down costs.

He tends to focus more on faster-growing companies, even if they are often more expensive than the bargains that cheap skate Buffett likes.

This got him into trouble.

Hasn’t lost his marbles, unlike one Harry Lee at 91

When I read,

Apple became the first company to reach a stockmarket value of $3trn. Shares in the iPhone-maker are up by 40% since the start of 2021; the firm now accounts for nearly 7% of the S&P 500. It took Apple 42 years to reach the trillion-dollar mark, in August 2018. It has tripled in value in just over three years.

Economist Expresso

I couldn’t help but think of Warren Buffett.

On 14 December 2021, it was reported

• Berkshire Hathaway’s Apple holdings of 887 million shares swelled to a value of $159 billion on Friday.
• That makes the stake worth half of Berkshire’s entire equity portfolio, and almost 25% of its $649 billion market capitalization.
• Warren Buffett started to build Berkshire’s position in Apple in 2016 and added to it up until mid-2018.

https://markets.businessinsider.com/news/stocks/warren-buffett-apple-stake-half-berkshire-hathaway-equity-portfolio-concentration-2021-12

Beat that Temasek, GIC and Ho Ching.

To be fair to him, his investment team initiated the initial purchases. He then decided that they were onto a good thing and kept on doubling up (Or is it doubling down?) repeatedly. HODL.

Buffett “responds” to our PM presumptive

Heng said last Saturday our time

It is “not a given” that having an opposition party, or having multiple parties, will “result in the best outcome for our society” …

“So the question is this: As our society becomes more diverse, as our people are better educated, better exposed all round the world, how do we harness the energies of everyone in a constructive way and to take Singapore forward? Rather than spend time scoring political points, debating for the sake of debating.”

Buffett said last Saturday at his co’s AGM:

In the end Berkshire should prove itself over time. There are no perpetuities and it needs to deserve to be continued in its present form.”

Since the time GCT and Ah Loong took over, the one-party state leaders have run into one problem after another: asset inflation, MRT breakdowns, immigration etc etc. The younger leaders have not proved themselves. They have been living off the legacies and ideas of the Old Guard.

PAP has lost “output legitimacy”

The PAP govt has lost “output legitimacy”: Discuss

Memo to Paper General heading Computer Security Agency

Even PAP voters don’t trust the PAP to tell the truth

But because there’s some form of Opposition, the PAP govt is forced to spend more of our money on S’poreans (not on foreign investment bankers and other advisers on our reserves) to keep its share of the popular vote above 60%.

Hard Truth why PAP wins and wins

Merdeka Generation: PAP cares for u, really they do

Under PAP rule will S’pore become like UK or Venezuela?

Imagine if there was no Oppo candidates to vote for? We’d have to eat bitter while our reserves pile up.

Vote wisely. Vote tactically.

 

What value Buffett shares with a “A Man for all Seasons”?

“Sir Thomas More: Why not be a teacher? You’d be a fine teacher; perhaps a great one.
Richard Rich: If I was, who would know it?
Sir Thomas More: You; your pupils; your friends; God. Not a bad public, that.”

― Robert Bolt, A Man for All Seasons

”If you want to be remembered for one thing in your life, what do you want to be remembered for?” Howard Buffett asked Warren Buffett. He told his grandson: “Being a teacher, educating other people.”

His grandson is an associate professor at at Columbia University’s School of International and Public Affairs. He has has co-authored a book on impact investing.

Impact investing refers to investments “made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.”

Impact investing – Wikipedia

More on Richard Rich

Rich is the supporting villain in the play A Man for All Seasons by Robert Bolt, which shows his slide toward corruption. In the subsequent, Oscar-winning film adaptation, he is played by John Hurt. Bolt depicts Rich as perjuring himself against More in order to become Attorney-General for Wales. More responds, “Why Richard, it profits a man nothing to give his soul for the whole world… but for Wales?”. The final line of the film notes that Rich “died in his bed” as a critical juxtaposition with More’s martyrdom.

https://en.wikipedia.org/wiki/Richard_Rich,_1st_Baron_Rich#In_popular_culture

PAP proves point made by Buffett

Warren Buffett said that if you put good managers into a bad business, the business will win. His message was that investors should back good businesses that control their markets and can be run by idiots, because one day the idiots will be in charge.

FT columnist

Re “investors should back good businesses … and can be run by idiots, because one day the idiots will be in charge” applies now to S’pore today and the foreeeable future because it seems the idiots are in charge.

Think of the fiascos around SMRT, GST, and economic strategies that don’t work (Economic restructuring: This time, it’s really different)

Don’t believe me? Why do we keep getting mediocre ministers?

Buffett’s a girlie man?

But that’s why he such a great investor?

Everything that made Warren Buffett the celebrated investor he is lines up with what we’ve learned about the tendencies of female investors. (Bloomberg)

NYT Dealbook

Piece written by feminist of the hairy armpits sort. At least she comes across like that.

Remember that Arnold Schwarzenegger (aka Terminator)and Republican govenor  of California referred to the state Democrats  as “girlie men” when they stalled and refused to pass his planned budget.

Gospel according to Saint Buffett

He said at his yearly fearival that it was “pro-social” for companies to lay off staff, given that productivity gains were crucial to advancing the economy.

Hilary supporter buys US$12bn of stocks

Not fake news.

Warren Buffet’s $12 billion investment. “We’ve, net, bought $12 billion of common stocks since the election,” he said in an interview with Charlie Rose. – Bloomberg

It must have pained the NYT’s Dealbook to report the above.

The bottom line: Trump is not going to destroy the US economy. Taz fake analysis from Hilary’s friends in the NYT, Washington Post etc.

Trump Triumphant.

“Don’t be a cheapskate”, Buffett says

The trouble is that there are very few people who knows what is a “wonderful co.” and what is a “fair price”.

So being a cheapskate may be a better option for most of us (self included).

Buffett: Bank fines like speeding tickets

Warren Buffett on Driving Violations, Baseball and Jamie Dimon Warren E. Buffett offers an unusual defense of Jamie Dimon, comparing the billions of dollars that JPMorgan Chase has paid in fines to state troopers handing out a speeding ticket.

• DEALBOOK

Two “secret” tecniques that Buffett uses

In March this ye, the FT carried an article “The $62bn secret of Warren Buffett’s success”.explaining that that he’s a leading proponent of delaying tax payments as long as possible.

A reader in response to the article said that this technique was part of another technique Buffett uses: unique, deep value liability funding strategy inasmuch as it is an investing strategy

Great article. Most of us misunderstand Buffett’s strategy. It’s a unique, deep value liability funding strategy inasmuch as it is an investing strategy. He was able to get 15%-20% return even if his stock investments only went up 5%. How? OPM leverage. Check out these guys’ explanation below – they’re really sharp. I’d keep an eye out for them: https://www.scmessina.com/2015/02/if-warren-buffett-had-to-start-today-could-he-still-reach-his-current-level-of-wealth/

More on Buffett’s Apple buy

It’s peanuts for starters, both fot Buffett and Apple.

According to the Wall Street Journal, Mr Buffett did not make the actual investment himself, meaning the order would have been placed by his stock-picking team Todd Combs and Ted Weschler. The paper says they are willing to invest in areas that Mr Buffett himself wouldn’t.

They are each thought to manage a $9bn portfolio and usually make the smaller investments, while Mr Buffett makes the big bets.

The Apple holding makes Berkshire Hathaway the 56th largest shareholder.

BBC

Where Buffett & PAP agree

From NYT’s Dealbook last Monday

WARREN BUFFETT TALKS OF SHARING THE WEALTH Nebraska has just hosted Berkshire Hathaway’s annual meeting, also known as Woodstock for Capitalists, at a time when Bernie Sanders has beaten Hillary Clinton in the Democratic caucuses and younger generations are questioning the very premise of capitalism.

This has not passed Warren Buffett by, Andrew Ross Sorkin writes in DealBook.

“You should be questioning it at that age,” Mr. Buffett said in an interview.

He acknowledged that the system “left too many people behind,” but said Mr. Sanders’s solutions were “are very off base.”

As for those skeptical young people, he said “The conclusion shouldn’t be to kill the golden goose.” Instead we need to make more eggs and better distribute them.

Now doesn’t “[W]e need to make more eggs and better distribute them” sound like what the PAP is telling us about “Growing the pie”? What do you think?

NYT Dealbiil goes on: Indeed, there was talk at the annual meeting of the businesses that power the economy and spur employment that perhaps required a slightly broader audience.

Mr. Buffett has mostly managed to avoid becoming a political target, in part because he is described as a compassionate capitalist. But critics say his folksy image is just for show, pointing to his partnership with 3G Capital, a company known for running a lean organization, and the wealth he has tied up in Berkshire, which itself is run to limit his tax bill.

But for a new generation entering the workplace with reasonable questions about the opportunities available in the current system, Mr. Buffett could provide another perspective, Mr. Sorkin writes.

“Twenty years from now, there’ll be far more output per capita in the United States in real terms than there is now,” Mr. Buffett said. “In 50 years, it’ll be far more. No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can’t end it.”

Buffett and us got bad golden anniversaries

Singapore’s economy is projected to have expanded 2% in 2015, making it the slowest pace of growth in six years. Mkt was down 15%, worst in SE Asia. And Indonesia and M’sia have been  the pits. Yet we did wotse than them

Investment guru Warren Buffett is headed for his worst year relative to the rest of the US stock market since 2009, with shares in his conglomerate Berkshire Hathaway down 11 per cent with two more trading days to go.

The underperformance comes in Mr Buffett’s Golden Anniversary year at the helm, when he told investors for the first time that they should judge his record based on Berkshire’s share price, rather than just the book value of the company, which had been his preferred yardstick for decades.

Mr Buffett urged them to make that judgment based on the long term, rather than on a single year, reflecting investing mentor Benjamin Graham’s view that the stock market may be a “weighing machine” in the long run, but in the short term it is a “voting machine”.

But in 2015, the market has been voting negatively on Berkshire’s prospects for weathering the decline in commodity prices, according to Jim Shanahan, analyst at Edward Jones.

Although Berkshire has no oil and gas subsidiaries, its railroad business transports oil, coal and agricultural products, and its manufacturing arm sells products to the shrinking oil industry. Weak results from Berkshire’s insurance divisions in the middle of the year may also be due to lower oil prices, Mr Shanahan said, since lower petrol prices mean drivers and truckers are on the road for longer and having more accidents.

“They are impacted by the weak resources sector and commodity prices in general,” he said.

Berkshire has also been hit by big declines in two of its largest stock market investments: American Express, which is down by 24 per cent this year; and IBM, which is down 13 per cent.

(FT a few days ago)

 

Buffett’s grandson invests too

BUFFETT’S GRANDSON SEEKS A DIFFERENT INVESTMENT ROUTE Howard Warren Buffett, the grandson of Warren E. Buffett, had until recently steered clear of the private sector investing that made his family’s fortune. Now that is changing – Mr. Buffett has helped found a permanently capitalized operating company with big ambitions, mimicking the structure of Berkshire Hathaway, David Gelles writes in DealBook.

Although his grandfather bought companies with timeless appeal, Mr. Buffett’s new company, i(x) Investments, plans to invest in early-stage and undervalued companies working on issues such as clean energy, sustainable agriculture and water scarcity.

But like Berkshire Hathaway, i(x) will buy and hold companies. “A fund structure, with its finite life cycle and investors wanting to see returns, is not the right model for impact investing,” said Trevor Neilson, a co-founder of i(x).

The company is just getting started but the founders are already talking a big game. Mr. Neilson said that friends and strategic partners were investing $2 million to $5 million this year.

Next year, i(x) will accept $200 million from family offices, institutional investors and big companies. Mr. Neilson is pitching to firms like Kleiner Perkins, Andreessen Horowitz and Google.

Mr. Neilson said he hoped that the firm would eventually make investments worth $100 million each year and file for an initial public offering by 2020.

So far, i(x) has not made any investments, though Mr. Neilson said the firm was close to taking its first two stakes.

One possible addition to its portfolio breeds crickets to feed to chickens and fish – an ecological alternative to traditional feedstock. Another makes machines to turn natural humidity into drinking water.

Mr. Neilson and Mr. Buffett say there is a growing market for such futuristic products as investors increasingly take ethics into account. In the meantime, Berkshire Hathaway is under scrutiny for investing in companies that have been criticized over social issues.

Mr. Buffett said he had not asked his grandfather for advice or money.

(NYT Dealbook)

Buffet was a Wharton drop-out

http://www.investopedia.com/articles/professionals/111015/3-accomplished-people-who-dropped-out-wharton.asp?utm_source=warren-buffett&utm_medium=email&utm_campaign=WBW-11/19/15&utm_term=warren-buffett

So if yr child or grandchild doesn’t do well in Pri 6, O-levels or A-levels relax.

The Moving Finger writes; and, having writ,
Moves on: nor all your Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all your Tears wash out a Word of it.

Tis labor lost thus to all doors to crawl,
Take thy good fortune, and thy bad withal;
Know for a surety each must play his game,
As from heaven’s dice-box fate’s dice chance to fall.

 

 

Warren Buffett touch for Oz?

Mr Buffett’s A$500m ($386m, £247m) investment in one of this country’s biggest insurers, Insurance Australia Group (IAG), has spurred speculation about other companies he might invest in.

Mr Buffett does not like taking risks, a senior analyst at investment research firm Morningstar, David Ellis, told the BBC.

“He wants a reliable return, and that’s what the Australian market gives him. It is very mature and well run,” explains Mr Ellis about why the American investor from Omaha has invested in IAG.

http://www.bbc.com/news/world-australia-33160690

LKY, Ho, Buffett and Keynes

“Investment based on genuine long-term expectation is so difficult today as to be scarcely practicable,” wrote Keynes in 1935. Only Buffett since then has shown that Keynes is wrong.

LKY (with his 30-yr investments in Merrill Lynch sold at a big loss after less than a few yrs, Citi and UBS) and Ho Ho Ho (with her investments in the Chinese banks and StanChart) show the wisdom of Keynes.

S&P index fund beats hedgies over 7 yrs/ Hedgies, PAP ministers & monkeys

With three years to go, Warren Buffett is comfortably winning his charity bet that a low-cost index tracker would trounce a portfolio of hedge funds over ten years.

Returns from the S&P 500 index fund is beating a portfolio of funds assembled by hedge fund manager Protégé Partners by 63.5 per cent to 19.6 per cent, according to a slide Mr Buffett presented at Berkshire Hathaway’s annual meeting this past weekend.

(Monday’s FT)

http://im.ft-static.com/content/images/1dcdf770-f288-11e4-b914-00144feab7de.img

As to what PAP ministers and hedgies have in common? They pay themselves a lot for mediocre performance.

The $11.6 billion which Institutional Investor’s Alpha calculates this ultra-elite [hedgies] was paid last year, an average of $467 million per hedge fund boss, would still seem troublingly high.

Such gains seem out of line with the value of their putative contributions. After all, the modern economy is built on collaborative effort, not to mention supportive governments and central banks. Even the greatest individual contributions would not merit an annual income, including gains from holdings, of about 10,000 times the average American salary.

…

To add insult to injury, Alpha calculates that at least 12 of the 25 top guys (sorry, ladies, no women in this club) underperformed in 2014. That is not surprising in a highly competitive industry. BarclayHedge, a consultant which monitors about 3,000 hedge funds, reports the average net return in 2014 was 3 percent. The U.S. stock market provided close to 14 percent.

http://blogs.reuters.com/breakingviews/2015/05/05/hedge-fund-pay-hauls-a-political-financial-shame/

We have one Ah Loong (since the 1980s), Lui, Yaacob and Lim Hng Kiang and had Wong Kang Seng, Mah Bow Tan, Raymond Lim and Goh Chok Tong.

SG50/ BRK50: Buffett’s 50th anniversary party

(Update on 2 May at 5.30pm: Another view http://www.economist.com/news/business-and-finance/21650309-future-worlds-sixth-largest-firm-unclear-berkshire-hathaways-meeting)

No big do like SG50, but then he doesn’t have a GE to fight.

Berkshire Hathaway Meeting On Saturday, more than 40,000 Berkshire Hathaway shareholders will descend on Omaha for the annual meeting of the company, which is celebrating its 50th anniversary. The gathering is known as Woodstock for Capitalists. Warren E. Buffett, Berkshire’s chairman and chief executive, and Charles T. Munger, its vice chairman, take questions for more than six hours, and their answers often make news.

Likely hot topics include the company’s recent investment in Kraft, its stakes in IBM and Coca-Cola, the debate around companies’ buying back their own shares and, a perennial favorite, succession planning.

Why Buffett hates investment bankers?

They cost him money.

Something I just read. It appeared on 3rd March in the NYT Dealbook

BUFFETT’S WARNING ON BANKS Warren E. Buffett has long ridiculed the financial industry. But his annual letter to shareholders “seemed to amp up the pugnacity and was clearly noted by the industry,” Andrew Ross Sorkin writes in the DealBook column. Mr. Buffett used his letter, published over the weekend, to warn his followers about “the Street’s denizens.” He criticized investment bankers for urging acquirers to pay up to 50 percent premiums over market price for publicly held businesses and railed against spinoffs.

“No doubt, Mr. Buffett speaks the truth. There are countless examples of the build-it-up-and-tear-it-down phenomenon,” Mr. Sorkin writes. “But as Mr. Buffett often points out the foibles of the finance industry, he also extols the personal virtues of some of the biggest names in investment banking. Berkshire owns a stake in Goldman Sachs, and Mr. Buffett has talked publicly about owning shares of JPMorgan Chase in his own account.” He has praised Lloyd C. Blankfein, Goldman’s chief executive, and Jamie Dimon, the chief executive of JPMorgan.

What explains Mr. Buffett’s stance on the industry? One investment banker and blogger wrote over the weekend that Mr. Buffett “despises investment bankers and employs his considerable folksy charm to scare potential business sellers away from using us for the plain and simple reason that we make his job harder and more expensive.” For his part, Mr. Buffett, when reached at his office in Omaha, explained that he was trying to educate his shareholders. “There’s nothing wrong with looking at the biases of a given field,” he said.

SG50/ BKR50: Buffett, LKY & Ah Loong

(Or “Ah Loong imitated Buffett, not dad”)

When business leaders make mistakes, they have nothing to lose from a proper apology

Thus runs the subtitle of a an aricle in an article sometime back FT which goes on: One business leader who has no problem detailing his mistakes is Warren Buffett. He regularly does it in his annual letter to shareholders. This year’s marked the golden anniversary of his and Charlie Munger’s control of Berkshire Hathaway so he dredged up 50 years of mistakes.

They included investing in dying textile companies and seeing acquisition “synergies” evaporate.

More recent mistakes included holding on to Tesco shares even though he knew it was likely that the UK retailer’s initial problems were just the first in a series. “You see a cockroach in your kitchen; as the days go by, you meet his relatives,” he wrote.

The reasons Mr Buffett gave for his mistakes were not poor advice, or lapses by his managers, but his own “thumb-sucking”, “childish behaviour” and “I simply was wrong”.

The advantage of pointing out your own errors is not only that it deprives others of the opportunity but that it makes it plain that business is hard, that we make mistakes and that only by examining them can we reduce, but not eliminate, our chances of making them again.(FT extract)

Well it didn’t work in politics for our PM did it?

Ah Loong in 2011 departed from dad’s Hard Truths of “Never explain, never apologise”, “PAP is never wrong”, “The message is always right. Blame the messenger, not the message”, “THE LKY way or the highway”, and “It’s the song, not the singer”..

In an attempt to avoid losing a GRC and setting a new record low for the popular vote, he said, “If we didn’t get it right, I’m sorry. But we will try better the next time.” 

It was an apology that Prime Minister Lee Hsien Loong saw fit to repeat twice on Tuesday during the People’s Action Party (PAP) first lunchtime rally at Boat Quay next to UOB Plaza.

PM Lee acknowledged some of the government’s initiatives have resulted in “side effects”, such as problem gambling among Singaporeans due to the opening of the Integrated Resorts.

He also cited the congestion in public transport because of the increased intake in foreigners.*

Fat good it did him or the PAP say the hardliners in the PAP and other “Lee Kuan Yew is always right” groupies: the PAP only got 60% of the votes (PAP’s worst result ever) and lost a GRC that had two ministers and one junior minister.

Worse in the presidential vote that followed, the PAP’s preferred candidate (Dr Tony Tan) won by a handful of votes from Dr Tan Cheng Bock. They shared 70% of the vote, showing that with the right formula, the PAP could do well.

The problem is that the PAP don’t have the right formula.

So apologising doesn’t always work, FT writer. The problem for Ah Loong is finding the right formula. More on the right formula soon.

——

*“These are real problems, we will tackle them.  But I hope you will understand when these problems vex you or disturb you or upset your lives, please bear with us, we are trying our best on your behalf,” said PM Lee to a crowd of about a thousand.

The secretary-general of the PAP continued, “And if we didn’t quite get it right, I’m sorry but we will try better the next time.”

Pushing on with a message he had for voters on Monday, PM Lee also admitted the government had made two other high-profile errors.

“We made a mistake when we let Mas Selamat run away. We made a mistake when Orchard Road got flooded,” he said.

“No government is perfect… we will make mistakes. But when it happens we should acknowledge it, we should apologise, take responsibility, put things right. If we are to discipline somebody, we will do that, [Err, the train services are getting worse under the “new” CEO and tpt minister, but no-one is being fired] and we must learn from the lessons and never make the same mistake again,” said PM Lee.

Yet, he explained the difficulties in making decisions with incomplete information.

For instance, if the government knew there would be a sudden surge in demand for HDB flats in mid-2009 and that foreigners would have created such congestion on the roads, it would have ramped up plans for more flats and MRT lines.

“We’re sorry we didn’t get it exactly right, but I hope you will understand and bear with us because we are trying our best to fix the problems,” he said.

The government will build 22,000 flats this year and open one new MRT line every year for the next seven years however, the government “has been right more often than wrong,”

https://sg.news.yahoo.com/blogs/singaporescene/pm-lee-didn-t-m-sorry-152850327.html

 

SG50/BKR50: Buffett taking lessons from PAP?

Fudging data without lying. LOL.

ANOTHER LOOK AT BUFFETT’S SUCCESS Warren E. Buffett has made Berkshire Hathaway’s shareholders “an astounding amount of money,” Jeff Sommer writes in the Strategies column. And he provided a window into just how much in his annual letter to shareholders, which included a table on its second page that enumerates the market return of Berkshire shares, year by year. Until now, Mr. Buffett has measured success using the change in book value of his shares.

“However you analyze it, Berkshire’s long-term performance has been awesome. Using market value, he says, its shares gained 21.6 percent annually compared with 19.4 percent for book value and 9.9 percent for the Standard & Poor’s 500-stock index, with dividends. Using market returns, the shares gained a cumulative 1,826,163 percent since he took control,” Mr. Sommer writes. But gone in his letter this year was a comparison between the book value return and the S.&P. return, which would show that he trailed the S.&.P. again, using book value. Counting 2014, Mr. Buffett has underperformed the S.&P. 500, using book value, in five of the last six years.

“By shifting to the market value metric ‒ for the first time in 50 years ‒ his returns look better. Would he have added a table on his golden anniversary showing market value if it had been a bad year for Berkshire in the stock market, whose judgment he has often disdained? I don’t know. Mr. Buffett declined to comment,” Mr. Sommer adds. But to outperform the market consistently, as Mr. Buffett has done over most of his career, “is exceedingly rare. That’s worth celebrating, even if it’s also worth asking why the recent years haven’t been extraordinary.”

NYT’s Dealbook

As I wrote here, the PAP like Buffett did very well in the early days by people who believed in them; not so well in recent yrs: https://atans1.wordpress.com/2015/02/24/sg50-versus-brk50/

Update on 21 March 2015. Letter to Economist defending change in comparison

Valuing Berkshire Hathaway

You criticised Warren Buffett for moving the goalposts by now giving more weight to Berkshire Hathaway’s share price than its book value (“Corresponderous”, March 7th). But the goalposts should have been moved long ago. The previous practice of using book value per share versus the total return of the S&P 500 was an apples-to-oranges comparison of an accounting measure with a market-valuation measure.

Naturally, Berkshire Hathaway’s book value per share would underperform when the S&P’s price-to-book ratio was soaring, as it did by 21% in 2013. Likewise it would outperform in years like 2008, when valuations were plunging. Comparing the change in Berkshire’s market value to the S&P’s total return is the best way of measuring how the market judges Berkshire’s strategy.

A.B. CAMPBELL
Minneapolis

SG50/ BKR50: Buffett on kia suism

Interesting that Warren Buffett has accidentally and unintentionally diagnosed what is holding S’poreans back.

“In the great majority of cases the lack of performance exceeding or even matching an unmanaged index in no way reflects lack of either intellectual capacity or integrity,” he wrote in 1965. “I think it is much more the product of: (1) group decisions — my perhaps jaundiced view is that it is close to impossible for outstanding investment management to come from a group of any size with all parties really participating in decisions; (2) a desire to conform to the policies and the portfolios of other large well-regarded organisations; (3) an institutional framework whereby average is ‘safe’ and the personal rewards for independent action are in no way commensurate with the general risk attached to such action; (4) an adherence to certain diversification practices which are irrational; and finally and importantly, (5) inertia.” (Latest annual report)

When the anti-PAP cybernuts rant against the PAP administration (including GIC and Temasek), they should remember one thing: the PAP administration and the cybernuts (and S’poreans in general) are all kia su.

This is what is holding us back.

If anything the cyberbuts are even more KS than most S’poreans. Most post anonymously. They would claim fear of the PAP administration. More likely they are pi seh to show how stupid and nutty they really are. They are not as brave as Roy, New Citizen H3 and Chia Yong Yong.

They may be extremely stupid but they are brave to parade their stupidity in public.

But let’s celebrate those who are brave and intelligent. People like Alex Au, Richard Wan, TRE’s techie Andrew, Affin Sha, Terry Xu, P Ravi, Siow Kum Hong, Baema and Martyn See. Though I do wish that Alex would stop wanting to take on the judiciary, and Martyn stop filing police reports.

 

BKR50: Buffett doesn’t do PAP SG50 BS

But then he doesn’t face a general election. He lets this metric talk the walk: Over the last 50 years,the stock is up 1,826,163 percent.

But to be fair to the PAP, he like the PAP did better in the early yrs than in the recent past: https://atans1.wordpress.com/2015/02/24/sg50-versus-brk50/

But then he doesn’t pay himself so much and he is no hypocrite unlike Jos Teo https://atans1.wordpress.com/2015/03/04/jos-teos-double-standards-walk-the-talk-chiams/ and Gan Kim Yong (See below for Gan’s hypocrisy and double standards.

BUFFETT HINTS AT SUCCESSOR Warren E. Buffett released his annual letter to shareholders on Saturday, reflecting on his 50 years in control of Berkshire Hathaway, one of the world’s biggest companies. In his 24,000-word letter to commemorate his golden anniversary at the company, Mr. Buffett looked back on less prescient moves. He also railed against investment bankers, accusing them of being nearsighted and self-serving.

But what made perhaps the most waves in the business world over the weekend was Mr. Buffett’s hint that the board of Berkshire Hathaway hadidentified his successor as chief executive. “Both the board and I believe we now have the right person to succeed me as C.E.O. ‒ a successor ready to assume the job the day after I die or step down,” Mr. Buffett wrote. “In certain important respects, this person will do a better job than I am doing.”

Mr. Buffett did not reveal that person’s identity, but in a separate letter, Charlie Munger, the vice chairman, suggested that either Ajit Jain, an insurance executive at the company, or Greg Abel, the head of Berkshire’s energy business, was most likely to receive the job. Mr. Buffett’s son Howard will become nonexecutive chairman when his father no longer serves in that role.

The letter also detailed Berkshire Hathaway’s success. Last year, the company’s market value increased by $18.3 billion. Over the last 50 years,the stock is up 1,826,163 percent. Although Berkshire did not strike any megadeals last year, it continued to grow by making 31 smaller so-called bolt-on acquisitions that will cost a total of $7.8 billion. Mr. Buffett also reiterated Berkshire’s interest in making a deal worth $5 billion to $20 billion, but he said that many of the deals pitched were of inferior quality.

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Well Gan, what about ministerial pay monetising public service?

[I]ntroducing a direct caregiver allowance may monetise family support and filial piety, said the Minister for Heath Mr Gan Kim Yong in Parliament on Tuesday (Mar 3).

In a written response … about whether the Ministry will consider the provision of allowance to caregivers taking care of an elderly, a family member with special needs or disabilities, Mr Gan said family support and filial piety are “priceless” and should not be monetised.

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SG50 versus BRK50

Berkshire Hathaway celebrates 50 years under Mr Buffett’s control this year

If you had $1000 in BKR in 1965, you’d be worth US$11m ++ http://www.businessinsider.sg/if-you-had-invested-with-warren-buffett-2014-8/#.VOryoXyUc7E

PAP got so good meh?

A little humility pls PAP. Especially as Mr Buffett pays himself “peanuts” by yr standards.

Buffett’s Hard Truth on analysts’ recommendations

Buffett said since he began investing in shares at the age of 11, he had never once bought something on the basis of an analyst recommendation. (FT)

What Scrooge McDuck can teach PAP ministers, TRE born losers etc

In the 60s and the 70s, I loved getting my hair cut once a month in the Arcade at Clifford Pier. One LKY had his hair there too but the reason why I loved going to the the barber was the comics the shop had. A particular favourite comic hero was Scrooge McDuck, the maternal uncle of Donald Duck, and the grand-uncle of Huey, Dewey and Louie, Donald’s nephews.

Recently, I learnt that he and Warren Buffett are connected.

http://www.investopedia.com/articles/investing/103014/what-can-investor-learn-ducktales.asp?utm_source=coattail-buffett&utm_medium=Email&utm_campaign=WBW-11/6/2014

The PAP administration and all managers (TLCs, GLCs, SMEs and MNCs) can learn from this story

In “The Curse of Castle McDuck” Uncle Scrooge and his nephews make a trip to Scotland to visit his birthplace. Along the way Uncle Scrooge finds his first piggy bank, and says “my life of thrift began with this very bank.” When our adventurers get to Castle McDuck, they discover the old pile is haunted by a glowing hound that terrorizes the locals, and at night druids perform secret rites within the castle walls.

Uncle Scrooge and the nephews trap the druids and their magical hound (which is, in fact, just a dog), and ask them why they drove the McDucks from Castle McDuck after it was built. It turns out that Silas McDuck, who first built Castle McDuck, did it on top of the druids’ stone circle “to cut costs.” Uncle Scrooge blushingly acknowledges that cost-cutting runs in the family. 

Realizing that the McDuck clan has been in error for centuries, Scrooge McDuck offers to share the site with the druids. During the day it will be a tourist site to make money, and at night the druids can perform their ceremonies. In the end, everybody wins.

Scrooge likes to say there is “always another rainbow”, something the born-loser rabid anti-PAP paper warriors should take to heart: stop KPKBing and start working, not skivving at work, or if enemployed, looking for work.

Perhaps PAP ministers can learn from him that money is not the most important thing in life.

Ordinary S’poreans can learn

— “Work smarter, not harder” (so can the PAP administration in its productivity drive)

— “Family is the most important thing”

A gd, disorganised entry from Wikipedia on him

Buffett talks to NYT

Enjoy ))). Love the bit about starving broker: I was one. Broker that is, not starving.

And he thinks short-selling is hard. He gave it up many yrs ago. I’m sure Olam would like to prove him right.

Berkshire: No Buffett premium

Time to buy?

http://online.barrons.com/article/follow_up.html

And did you know Dairy Queen (his ice cream maker is in S’pore? I didn’t.

http://money.msn.com/business-news/article.aspx?feed=BLOOM&date=20120307&id=14869108

Warren Buffett: Planet wrecker investor

His investments are wrecking the world

http://www.huffingtonpost.com/r-paul-herman/warren-buffetts-billions-_b_1251884.html

Buffett on Gold

Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce — gold’s price as I write this — its value would be about $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

(Apologies for not crediting where I got this from: feeling tired)

He bot preferreds, stupid

Or the perils of trying to copy Buffett by buying ordinary GE and Goldman Sachs shares. http://dealbook.nytimes.com/2011/09/14/buffetts-not-so-golden-touch/?nl=business&emc=dlbkpma21

Warren Buffett’s past reincarnation?

Mycroft Holmes is the elder brother (by seven years) of the famous Sherlock Holmes. He has greater deductive powers than Sherlock Holmes, but according to Sherlock,  he is unwilling to put in the physical effort necessary to bring cases to their conclusions.

Given that Warren Buffett doesn’t like to exert himself but is a genius at spotting investments by deductive means, he could be a reincarnation of Mycroft Holmes. If so the spirit of Mycroft Holmes has found the the perfect use for his deductive skills, and reclusive and indolent nature: investment genius.

Masterclass in analysis: Buffett’s BOA deal

When Warren E. Buffett invests in a troubled company, he gets a good deal. Dealbreaker’s Matt Levine crunched the numbers on Mr. Buffett’s Bank of America investment and estimates that the bank’s implied stock price in the $5 billion deal was $5.28 per share, more than $2 lower than where it currently trades. Note the way he uses less than precise assumptions to avoid getting into complications.

http://dealbreaker.com/2011/08/how-much-did-warren-buffett-pay-for-bofa-anyway/