giofranchi

Yeah…! Surely there are always strong emotions attached to this kind of business decisions… Yet, numbers don’t care about emotions and usually don’t lie. Journalists, on the contrary, mostly write about emotions and don’t care about numbers… Imo a disservice! Gio

I agree 100% ;) Gio

What do you mean exactly? PSH’s assets are USD denominated, just like its stock price… Aren’t they? Gio

Thank you, Liberty! I didn’t remember Fisher’s quote, but that’s exactly my thought as well: I am buying VRX because I now feel much more comfortable with its business model, in spite of the fact the price of its share has gone up significantly. ;) Gio

No, I am not sure… Maybe Liberty could be of some help... Though, I would say this: differently from a quote by Morningstar which appeared some posts ago, I think XIFAXAN proves that VRX’s strategy of buying R&D that looks promising, instead of spending too much money on it internally, has been followed also with the Salix acquisition. Therefore, imo Pearson is very consistent in what he is doing. :) Gio

Also, like wellmont has rightly pointed out, Cash EPS might reach $15 very soon… Therefore, what have we got here? A company whose quality is much higher than the average S&P500 company, selling for 13.5 x Cash EPS; while the S&P500, whose average quality is much lower than VRX’s, is selling for 20 x EPS… Not bad! :) Gio

Ah!!... I am still a bit cautious, but actually I am gradually adding… Not reducing nor exiting! As I have said, after what happened in 2014, I have become much more comfortable with VRX’s business model… And I think the most likely scenario by far is rapid growth for the next 5-8 years. If rapid growth materializes, those ratios will get compressed very soon! ;) Gio

Thank you! ;) Gio

Ackman is already up 6.8% net of fees on 2015, which is undoubtedly very good. I know many are skeptical because he is fully invested in an overheated stock market… But it is precisely in this situation that I like investing with a catalyst (his activist strategies), because it tends to shorten the time required for value to be both created and recognized. Of course, if you want to stay in cash and not to be invested, no catalyst will change your mind. But for those who want to own great businesses no matter what the market is doing I think PSH should be at least taken into consideration. ;) Cheers, Gio

February 2015 Performance and NAV/share at $28.17 Gio Monthly-NAV-and-Performance-FEB-2015-Press-Release.pdf

I doubt that anyone discusses specific ideas in his/her letters… As for the techniques I think Packer (if I am not wrong) once suggested a book he thought was very useful on the subject… Though I cannot remember its title right now… Gio

Howard Marks...?? ;) Gio

I don’t think it is right to compare BRK to other P&C insurance companies: BRK can make investments no other P&C insurance company could think of, because its streams of earnings are way much larger and more diversified than those of any other P&C insurance company in the world. --WB 2014 AL Of course, at Fairfax we are not there yet… But working hard on it! ;) Cheers, Gio

--WB 2014 AL Just food for thought ;) Gio

If I am right about the business, I am not paying much at all! If I am wrong, then I deserve to have mediocre or bad investment results… Isn’t it always that way? Gio

Because that's what Howard Marks said during the last conference call! ;) Gio

March 2015 Market Commentary Gio Buy_and_Hold_Mar_2015_FINAL.pdf

Of course I don’t have a clue about such a huge organization as BRK has become these days… But, if I am to vote, I will do so sticking to my experience as a businessman: any business I know is the brainchild of one person only. Cheers, Gio

Martin Capital Management 2014 Annual Letter Gio Martin-Capital-Management-2014AL.pdf

When the USD was weak, I thought it was a no brainer to hold lots of cash in short term US treasuries. Now that we have a strong USD (and as a consequence I have made money thanks to a much improved USD/EUR exchange rate), I don’t feel so comfortable anymore about holding large sums in USD denominated cash equivalents. Instead, I have decided to invest in businesses which hold lots of cash themselves and with the proven ability to raise lots of capital in a market crash. OAK imo perfectly fits the description. And my decision has nothing to do with how the stock price of these companies might behave in a market crash. I simply have no idea about what OAK’s stock price will do in a market crash. Gio

Maybe you are right… But the math remains clear imo: 7% annual (instead of 8.9% historically) return on their portfolio of investments and FFH will compound BVPS at 15% annual. Selling today at 1.3 x BVPS, if in 10 years FFH still sells for 1.3 x BVPS, my return will be 15% compounded annual. Gio

+1 I agree 100%. That's why I am happy to be a VRX shareholder again! :) Gio

Imo hurdle rate and discount rate are two different things… I look for businesses that have at least the possibility to return 15% annual compounded, and that’s my hurdle rate. But I use 9%-10% as a discount rate, whenever I try to perform a DCF analysis. In other words, I use 9%-10% to calculate IV, then I try to buy with a sufficient gap between price and IV in order to achieve a compounded annual return of 15%. Gio

I take the CAGR for the S&P500 that I find on the front page of the last Berkshire Letter to Shareholders, and simply use that number as my discount rate. :) Cheers, Gio

Paul, you know very well that “a pretty strong investment environment” doesn’t mean it has been a “safe nor easy investment environment”. And those companies don’t reach for yield in an investment environment that is “strong” only because of unbelievable money printing… Have they been too conservative? Of course they have! Have they made a mistake? Of course they have! Was it an easy situation? Not at all! ;) Gio