Jurgis

If you listen carefully, she never said "engineer". Although I agree that Watson sub and IBM research still attract interest and possibly even high quality interest. But that's very small part of the company.

LOLZ. Yeah, go ahead find hungry engineers who will work for the dinosaur IBM. Good luck. Nobody young, smart and hungry will go to work for them. Maybe for Watson sub if they are not treated like IBM-serf there. You talk as if it's the hirer's (employer's) market. It's not. It's the employee (engineers') market and they can get much better jobs than IBM.

The stock price is over $500 per share. Of course it's expensive! Duh, what are you guys thinking... Just kidding 8)

I am holding a small meeting to discuss Fairfax on Saturday, February 28th at 1pm at my place. If anyone is interested, let me know and I'll send address. Though the meeting is about Fairfax, it is not formal, so we'll have friendly banter about whatever else is interesting too. :) I got only one or two private messages interested in a larger informal meeting at some Boston location. Looking at the calendar, the earliest I can do something on a weekend is March 14-15. Any interest in a lunch or dinner get together?

I am driving on March 24th from Mountain View to LA. Not driving back (flying out of LAX late on March 25th). If anyone wants a one-way ride and 5+ hours of investment banter, let me know. 8) So how do we recognize fellow CoBFers at the meeting? I'm definitely interested in lunch after the meeting. Preferably a place with some veggie options. :) Though company is more important than the place. ;)

Today's jump is likely due to Brit Plc. purchase and not due to delayed reaction to Q4 results. That said, I decided to go "passive investor" at New Year's by selling most my positions and putting my money into Fairfax. I bought most of my planned allocation before today's jump. It's better to be lucky than smart. 8)

This is interesting. :) Think about it: Buffett makes tons of money on PetroChina. I guess he thinks "I can do it in oil". Then he buys COP - does not do well, sells. Buys XOM, does not do well, sells. Does he now think "Nah, I can't do it in oil"? :) Note: all errors and omissions mine. I went from memory and was too lazy to check facts. :)

Morningstar - I completely agree.

Looks right. OK, I am 90% coming. :) (Haven't got my tickets yet - trying to setup schedule with friends & family) Couple questions: - Where did you guys park? I looked on Google maps street view and I don't see any parking lots - there's one for the office building, but I don't think we can park there, can we? Was the street parking available? Could you park for more than 2 hours on the street? - I'd like to join for lunch. The area around the meeting place looks pretty desolate, but I guess Little Tokyo area should have some restaurants. It's <1 mile from the meeting place. - How do we recognize CoBF people? Secret handshake? Tulip in the jacket lapel? Cheap Walmart slacks? (just kidding). As I mentioned, I am not a shareholder right now. I guess I could buy 1 share for admission. Proxy does not mention any documents for attendance, so I guess I can get in. But if not, would one of you invite me as a guest? ;)

It is 949 E. 2nd Street. Not avenue. Quite different place. 8)

Cheap, cheap, Apple watch, cheap fol you... 8)

I wonder how much BNSF is (will be?) impacted by oil drop and possibly lower shale oil production. Not a reason to sell BRK, but might be a reason for BRK stock to underperform for a while.

Good post theasiareport 8)

Does this mean that we should make Bear's and Lehman's and WaMu shareholders whole too? ;)

It is possible that Dalio will be successful. But then you have to invest with him. :) Since I doubt that people on this board can successfully replicate Dalio in toto. They might hang onto one of his ideas, but that's not necessarily what makes his results good. Compare this to someone who listens to Buffett talk about inflation all the time and then invests as if inflation will happen. They would likely underperform both market and Buffett.

I don't agree (but I am not a lawyer :)). One way is to partially nationalize which would dilute the common to the hilt. It's impossible to dilute preferreds. To make prefs worth less than par, you have to go through formal recap in which case they come before common, but might be worth little and common might be worth nothing. In general though, I think most arguments in this case are emotional or mind-screwing variety from people with ownership agenda (i.e. people holding securities that are possibly worthless will argue anything to prove they are right and other side is wrong). Personally, I am on the government (and Munger/Buffett) side on this: if government would not have backstopped Fannie/Freddie, they'd be BK and worthless now. So IMHO from common sense, government should have nearly 100% ownership in remaining entity. Legal case might have completely different result though - common sense is not what the law is about. ;)

This is the usual macro bear argument that people have been repeating from 1980s and possibly before (I have not been around before that). There are couple issues with that: - By being in cash/etc. you are horrendously underperforming for couple years now. So it might not matter that your portfolio will drop only 30% in a crash compared to 50% of someone who is 100% in equities. Your long term result will be worse. - You are assuming that Dalio will perform better in a crash. So far a lot of algorithmic shops collapsed during the crashes because their models were not crash proof. Pretty much no value investor every collapsed during a crash. Or they recovered. - You have a mental model of what will happen. This is very dangerous. I can almost guarantee that you don't know what will happen and pretty much nobody else does. Hey, Buffett has been wrong about inflation for 20+ years. That being said, I am fine with people holding Graham-like portfolio of having 20-50% money in bonds as long as this is not a market call, not a macro call, but forever philosophy independent of the market/macro etc. Just don't expect the 100% equity returns.

Assuming current price on common ($2.75 for FNMA), it has to get to ~$25 to outperform pref return (assuming ~$6 to $50 return for prefs). Looking at pre-collapse prices of $40-60, $25+ on common is possible only with minimal dilution and no capital injection required. I'd say it's possible for common to outperform prefs, but not very likely. This is back of envelope calculation, possibly with big holes. :)

KCLarkin - yes, I don't own any airline stocks and don't plan to own any. I am doubtful about "this time is different", but I don't have a very strong conviction one way or the other.

Yes. This is part of the argument why "this time is different" for airlines. Oligopoly in US. It is unclear how much Alaska, Southwest, Virgin, Spirit can screw up the big 3... Also will international carriers try to get intra-US routes.

I think most people - or at least most active managers - say what you have said. However, there are two issues with your thoughts. First, there is no guarantee that active managers will outperform in the bear market. In fact a lot of them got caught in the financial positions in 2007 and got creamed on the downside compared to SP500. Second, even if they will outperform in the bear, there is no guarantee that they will outperform for the whole cycle if they are underperforming now. I think that people should be careful when repeating the "SP500 is overowned" mantra. If someone exited SP500 in 2013 or 2014 based on this "insight", they'd already have one/two years of underperformance.

February 15th meeting is cancelled due to the snowstorm. I'll be rescheduling it with my friends and will post the new date on the board too. I did not get any feedback on If you guys want to do a meeting, it would be great to hear preferences of where/when/etc.

I don't think KO produced 10% return with bad CEOs. I think pretty much any business can be killed by bad CEO. Of course, if Buffett owns a large chunk of such business, he's likely to can the CEO faster than the business loses 50% of its value. I will agree that there are some businesses that are likely to be resilient to some "unknowns". So your idea to buy businesses resilient to most "unknowns" might be good one. I just don't believe that any businesses are resilient to bad CEO. And in "bad" I don't necessarily mean corrupt or stupid. They might be just not fit the business and the context the business finds itself in. Edit: if you want another example, take JNJ. I don't know if we can blame CEO on this one, but this is an example where Buffett business was hit hard by "unknowns". Of course, it recovered - after CEO change and Buffett selling... :)

I am pretty sure Mr. Big can do this honor himself. ;D

Nice soundbyte, but I don't think that I was ever killed in investments by "what you know for sure that ain't true".