Black Monday

[Recaster]

Another;The Secret Broker;
\https://stockhead.cmail20.com/t/d-l-...d-yupddjlly-u/

Excellent article. Thanks Percy.

[Onemootpoint]

I agree Berkshire or Buffett will be hard to beat. We try to imitate him(likely in vain) by trying to find undervalued companies and attempt to replicate his temperament. But I think there is one area very few can imitate.

It's when he buys into a company and its get him on a seat at the board. It has been mentioned many times that he doesn't want to control the CEOs actions or day to day operations of the company. But I guess think about the dynamics. You have Buffett on the board that is considered by many people as the greatest capital allocator. He stands right beside the CEO ready and waiting. So you can only imagine the discussions between him and the CEOs. He wont be forcefully, he will simply nudge him/her in the right direction. We can try to be every else that Buffett is great at, but this aspect is difficult to replicate. Undervalued is in the current/past context and we do our best to think it will move towards intrinsic. In alot of cases he has a tangible influence on the companys future. Perhaps that is why is called the oracle (he makes his own miracles) I think he has denied in the past this aspect. But I think it's all part of his humility.

Capital allocation is the downfall of many CEOs, companies and ultimately shareholders. To have Buffett on the board. That can never be underestimated.

Obviously you can tell I'm a Buffett fan.

He definitely has pulling power, and a lot of influence.

His post Japan trip interview on CNBC was interesting.

[SailorRob]

I agree Berkshire or Buffett will be hard to beat. We try to imitate him(likely in vain) by trying to find undervalued companies and attempt to replicate his temperament. But I think there is one area very few can imitate.

It's when he buys into a company and its get him on a seat at the board. It has been mentioned many times that he doesn't want to control the CEOs actions or day to day operations of the company. But I guess think about the dynamics. You have Buffett on the board that is considered by many people as the greatest capital allocator. He stands right beside the CEO ready and waiting. So you can only imagine the discussions between him and the CEOs. He wont be forcefully, he will simply nudge him/her in the right direction. We can try to be every else that Buffett is great at, but this aspect is difficult to replicate. Undervalued is in the current/past context and we do our best to think it will move towards intrinsic. In alot of cases he has a tangible influence on the companys future. Perhaps that is why is called the oracle (he makes his own miracles) I think he has denied in the past this aspect. But I think it's all part of his humility.

Capital allocation is the downfall of many CEOs, companies and ultimately shareholders. To have Buffett on the board. That can never be underestimated.

Obviously you can tell I'm a Buffett fan.

Good post and very interesting you say this now as the CNBC interview alludes to what you have highlighted but in the context of the fully owned companies. Buffett and Greg Able both said that Greg is much more forceful than Warren and will tolerate less deviation from perfection.

What you have highlighted is true in the public equities and more so in the private.

My comment regarding difficult to beat is in part due to the fact that Berkshire has grown EPS at a far higher rate than the market over the last 10 years and is valued much lower currently. 2 very powerful forces. They have a virtually unlimited runway to reinvest all earnings at 10% + and augment that with free float as well as incredibly low rate debt such as the Japan issues.

[SailorRob]

Another;The Secret Broker;
\https://stockhead.cmail20.com/t/d-l-...d-yupddjlly-u/

Great article percy,

I'll add to it with this;

https://open.substack.com/pub/auckla...m_medium=email

His numbers are off, maintenance WAY higher and S&P500 returns 10% not 8% so his argument is dramatically understated.

Everyone thinks property makes them rich but the truth is the very opposite.

It's what will stop them from ever being rich.

[Bobdn]

S&P real rate of return is 6.7 per cent. From J Siegel, Stocks for the Long Run, the most recent edition. So that's 6.7 per cent after inflation. Add inflation and one gets the 10 per cent or close enough.

[SailorRob]

S&P real rate of return is 6.7 per cent. From J Siegel, Stocks for the Long Run, the most recent edition. So that's 6.7 per cent after inflation. Add inflation and one gets the 10 per cent or close enough.

Yep that's right.

Compounding at at 6.7% real over your lifetime will produce astonishing results.

[Fortunecookie]

Good post and very interesting you say this now as the CNBC interview alludes to what you have highlighted but in the context of the fully owned companies. Buffett and Greg Able both said that Greg is much more forceful than Warren and will tolerate less deviation from perfection.

What you have highlighted is true in the public equities and more so in the private.

My comment regarding difficult to beat is in part due to the fact that Berkshire has grown EPS at a far higher rate than the market over the last 10 years and is valued much lower currently. 2 very powerful forces. They have a virtually unlimited runway to reinvest all earnings at 10% + and augment that with free float as well as incredibly low rate debt such as the Japan issues.

I see what you mean. Berkshire is well positioned. They seem to have plenty of cash to invest at any time, purely because it just generates cash. I am not familiar with Abel I have to admit. He seems very successful in his own right and he has been part of the Berkshire ecosystem. I do get the feeling Buffett has always been stern in decision making, but never liked confrontation. So this direct approach from Abel is an interesting contrast. Knowing Buffett he would have done a thorough job sussing him out for the role.

Its interesting they are buying into Japan banks. It reminds me of the the Chandlers brothers from Hamilton. At one time they bought into a Japan Bank. They ran a very concentrated portfolio and achieved a excellent investment record. I don't think too many people in this country know about them. But they are right up with the great investors. I think 30% plus p.a over 20 years.

[bull....]

6.7% over the long run of US markets might be right but for most people that is not the case. most people investing horizon is a limited amount of time therefore returns depend on when you start and when you end and how index's perform within that time period
as the article i posted on this thread mths ago proved for most people 6.7% is not reality

[SailorRob]

6.7% over the long run of US markets might be right but for most people that is not the case. most people investing horizon is a limited amount of time therefore returns depend on when you start and when you end and how index's perform within that time period
as the article i posted on this thread mths ago proved for most people 6.7% is not reality

Not even close no. I think nominal around 2% on average according to JP Morgan, so in real terms most lose money over time.

[Entrep]

Interesting articles and discussion.

So, sell all rental properties and buy BRK-B?

Also, those examples account for the inherit leverage in property correct? It seemed like they did from the wording.