OCA - Oceania Group - retirement villages

[SailorRob]

First of all, there are two separate things here.

1) Berkshire has been a wonderful investment for a very long time. I have no issue with this at all; I mean, the Buffett "magic formula" is the reason for this success, and that is to be commended as it has provided very good - and consistent - shareholder return. But that magic formula is something only the very rich can utilize, and Buffett has deliberately implied over decades that he's just a "value" investor - and it's total BS, let's get to point 2).

2) Berkshire and Buffett have for decades had the ability to gerrymander share purchases via two mechanisms not available to regular investors. They are buying preferred stock and placing cronies onto boards. He reduces risk significantly by moving up the queue with preferred stock if there's a problem with a company he has bought into, and the board representation significantly reduces the possibility of problems arising is the first place. Neither of these things are available to your average punter, such as the deluded "value"-type investors you see on this website, who believe that "future discounted blah blah blah" means they're onto a winner and given enough time and patience they'll be in the money. But it's a fantasy; they have no clue what's going on at the company and are subject to the whims of market price for their shares which will likely have value nothing close to whatever fantasy-land value they think it should be. And the common stock they own means when it does go very bad they'll have a pile of shares worth zero.

Will respond in full later, the obvious response here however, is that of all the hundreds of businesses that Berkshire owns 100% of... Thus his men are the entire boards and managers.... Must do way better than public companies that he only has a few cronies on?

His preferred stock usually much safer but far lower return than common and his GFC bailouts etc have added very little to overall performance.

It's actually his size that has massively reduced his returns.

But yeah. If having cronies on the board helps somewhat then having all your people 100% in control must be way way better still.

I'm not arguing that having board representation doesn't help, it does if they're getting instructions from God.

[SailorRob]

Geez Sailor you a slow learner or something? You didnt need to spend that long surely

Early days, I'm just beginning. A very very long way to go.

[SailorRob]

One person on the board is better than none. Having the entire board is even better than that. But it's not "value" investing; it's being very rich, and effectively purchasing the day-to-day knowledge of the workings of the company and also being able to weigh up and be part of decision making.

Again the implications there are that his 100% owned companies would do way better than public ones. And implications are that he'd be only private as much better to have full control.

Neither passes the test.

The wrong or too expensive companies you can have all the control you like and it won't matter.

How does his Apple purchases fit into your framework.

Apple fell 37% after he bought.

Paramount??

Anyone could have bought apple at 10x earnings with no debt. Value investing....

[SailorRob]

One person on the board is better than none. Having the entire board is even better than that. But it's not "value" investing; it's being very rich, and effectively purchasing day-to-day knowledge of the workings of the company and also being able to weigh up the knowledge and be part of decision making.

And how does the fact that by far his best returns were when he didn't have any money?

His partnership days he was way better than under Berkshire.

Facts don't line up with narrative thought what you say is somewhat true.

[SailorRob]

One person on the board is better than none. Having the entire board is even better than that. But it's not "value" investing; it's being very rich, and effectively purchasing day-to-day knowledge of the workings of the company, and being able to weigh up the knowledge and be part of decision making.

Washington Post is an example of where his board membership and mates with Kate made thousands of percent returns but he took everyone else along with him and made the business way better.

[SailorRob]

Sorry shouldn't be doing this on OCA thread...

[SailorRob]

Maybe you can write him a letter, and tell him to stop investing in a manner that allows him board seats. You have facts behind you to prove he'd be better off.

No he wouldn't be better off, it makes everything better, it's beneficial to the company to have the best in the world helping out. Part of his skill as the greatest.

But overall, does he make all these companies that much better?

Is there statistical evidence that Berkshire men on the board lead to outperformance, if so how much and what's it on relation to Berkshire overall.

Buy cheap, estimate future cashflows reasonably well, use borrowed money that you get paid to borrow.

Magic.

[SailorRob]

In a way it does: because I see so much on this thread that implies this is a so-called value play.

Free money I guess you can call a value play.

Berkshire would buy in a heartbeat for reasons Mav laid out.

[RTM]

Sorry shouldn't be doing this on OCA thread...

Nah…it’s good. You and others said about everything there is to say about OCA. Need more info/ data for further consideration. I guess that’s why the convo has morphed….

[bull....]

Free money I guess you can call a value play.

Berkshire would buy in a heartbeat for reasons Mav laid out.

yet buffett has not brought .... says it all. maybe mcquarie by it back one day ... smart cookies they are