zarley

Well, they could just be wrong, not lying. Plus, they may have ample assets to pull off the transformation, but that doesn't mean the end result can/will compete and win against Amazon, Ebay, and WalMart.

I know the ball park net-worth and the general trajectory. That's enough. The idea of tracking monthly or quarterly in a spreadsheet seems weird to me. I closely track thing's I directly control (bank accounts and investments), but leave the rest (pension value, home equity, retirement accounts, etc.) in the roughly right pile. I look at them from time to time, but I don't specifically account for them in a spreadsheet or other calculation. To me the number doesn't matter, it's the trajectory and the implications of where it ends by the time I need to retire.

Lightened up again on Western Digital (WDC). Down to just a few hundred shares now. Was the second largest holding for me, but that's harder to justify at $97. Cash position up to 17%

I think there is a misconception about what I try to do while investing my firm’s capital. I look for great entrepreneurs, not great managers. When I hire someone, I look for a great manager; when I invest, I look for a great entrepreneur. I think the difference is huge. Gio What a curious non sequitur. The issue isn't a balancing of his entrepreneurial ability vs. his management ability, it's a question of trust and integrity. People view him as lacking personal integrity and see the name thing and the compensation issue as examples of why they don't trust him. From that view, it's a question of why do you choose to do business with someone you don't trust. It seems that you either believe that people have misunderstood Biglari's motivations and actions, and that he's done nothing to make you feel you can't trust him, or you feel like even though he has questionable character, his other skills will make BH, as an investment vehicle, so profitable that it won't matter if he's skimming a little extra for himself off the top in the process.

INTP; not an engineer. Not detailed enough to be an engineer. I'm very much a "roughly right" kind of guy. ;D

Not understanding the math here. PB x .2 x (1/.300795) = PB x .665 <== seems too high Given the spin-off ratios wouldn't the math work out something like this: SHLD + LE = BASIS LE = .3 x SHLD SHLD + (.3 x SHLD) = BASIS 1.3 x SHLD = BASIS SHLD = BASIS / 1.3 SHLD = BASIS x .769 LE = .3 x (BASIS x .769) LE = BASIS x .231 Conceptually this makes sense to me, but I have no idea if I'm missing some convention of spin-off accounting that makes my math all wrong. For example, is the sharing of cost basis to each piece (SHLD + LE) done based on something other than the ratio of shares held/spun?

A long time Berkshire owner and former Sequoia fund manager shares an interesting perspective on Berkshire and life after Buffett: http://www.beyondproxy.com/berkshire-hathaway-without-warren-buffett/?utm_source=rss&utm_medium=rss&utm_campaign=berkshire-hathaway-without-warren-buffett&utm_source=beyondproxy&utm_medium=twitter It's a good read and I tend to agree with it in broad strokes. It may reflect a sort of conventional wisdom of long-term Berkshire owners. He does hit on one issue that is among my big concerns about Berkshire after Buffett. Not succession at the CEO level, but succession at the one or two levels below that. Although I'm not sure he fully answers what this might mean for Berkshire going forward, it is certainly an issue, directly related to the importance of Buffett to the organisation. He does lay out one vision of Berkshire, with Ajit as CEO that seems quite plausible and ruminates a little bit on the durability of the Berkshire culture and the history of conglomerates. All in all a very good read.

I've recently been reading the Aleph Blog after adding it to my RSS feed. It's a great blog, written by an advisor named David Merkel. In the last couple days he's posted a bit about the corporate structure at Berkshire. Part 1: http://alephblog.com/2014/03/12/on-the-structure-of-berkshire-hathaway/ Part 2: http://alephblog.com/2014/03/14/on-the-structure-of-berkshire-hathaway-part-2-the-harney-investment-trust/ There's an interesting bit in Part 2 which discusses the structure of National Indemnity and something called the Harney Investment Trust . . . Now, I was reading quickly, so I didn't think anything of that the first time through. But after finishing I went back and looked at the quoted part in that section again and followed the link he was helpful enough to provide. Which lead me to a thread right here at the corner: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/insider-quarterly-article-on-ajit/10/ The globalfinancepartners noted in the post is, of course, a regular here. Although somehow, I managed to miss that particular thread. The two part discussion at The Aleph Blog are well worth reading for owners of BRK. the circle-back reference to this board was just a nice cherry on top.

Please don't get me wrong. This sort of choice is very much an individual choice and very dependent on the specific circumstances of each person. In my case, I've convinced myself that I am adding value over just buying and holding the index, but for a few reasons, the prospect of quitting my day job and/or running OPM doesn't make sense for me. There are certainly people on this board who I would consider if I needed an investment advisor (Ben Hacker for one). Perhaps I'm too cautious, which causes me to see parallels between now and 1999 when it's inappropriate. Mostly just thinking out loud that year 5/6 of a raging bull market is a dangerous time to project out your 5 year investment returns as part of an early retirement plan. That may work out just fine for some people, but . . . again, I'm pretty conservative.

Congrats Ben. I've followed boards you've been active on for quite a while and have always been impressed by the quality of your thinking. Good luck to you. Like many here, I've considered a similar path, but at this point haven't followed it. I'm not at all certain that investing as a full-time endeavor would be better for me financially than working full-time and investing as a hobby. Investing part time over the last 6-7 years I've managed to beat the VFINX by 2-3% per year. A balanced asset allocation leading into 2008, good timing on SHLD and BRK, and buying lots of WDC in 2011 account for most of the outperformance. I'm quite pleased with that result, but I'm not sure if that would have been +5% or more per year if I was doing it full time. Honestly, I doubt it. Plus, having OPM to deal with may have changed my perspective on risk taking (I'm already rather conservative) and left me with much more pedestrian results. I'd have a hard time charging x% of assets if I'm not doing much better than the index. Barring economic catastrophe or serious health issues for my family, my status quo trajectory is quite good. Sure, I'd rather quit my job and spend my days reading and researching stocks, but it's not clear that I'd improve my lot much, if at all. One final observation (directed at no one in particular): this thread reminds me quite a lot of the cubicle conversations I'd hear back in 1999. Everyone was just one more good year on the NASDAQ away from retiring early. This is a savvier group of investors, but the sentiment doesn't seem all that different.

Interesting. I was under the impression that the saturday release practice ended in 2012. In any event, I apologize for the bad information. Looks like I'll read it with my coffee and not a glass of wine. ;)

I think Friday after market close is the base expectation. Friday of the last week of the first quarter is the standard, IIRC.

That was my initial thought too. It might let Berkshire eliminate the position in Graham Holdings in a tax efficient manner and retire some BRK shares in the process. It's not huge numbers, but a billion here and a billion there . . . pretty soon you're talking real money. :)

Outstanding link. Thanks for sharing.

Are you associated with the brooklyn investor blog (http://brooklyninvestor.blogspot.com/)?

I always feel uneasy about second guessing Buffett, but IBM looks like a company that peaked in 2011 and has been using every accounting trick in the book to fake the appearance of forward momentum. Shrinking the share count is all well and good, but I'm pretty sure an 11% tax rate shouldn't be the long-run expectation.

I think that's the best case scenario for SHLD and LE right now. Is there any reason to spin LE off rather than selling it directly to a third party?

What's wrong with sticking it into a single index fund and forgetting it? As for 2008, it was not a predictable event that a naive investor could have planned for and adjusted his allocation to deal with. A naive investor that can follow one or two simple asset allocation rules could prevent being 100% anything at the worst possible moment. I'm not talking about predicting 2008, but adjusting your holdings for your time frame. Being 100% stock at age 28 is different from being 100% stock at age 58.

Why? Apart from 401k's and other stuff that I don't understand being non-American I would say this is excellent advice for 90% of all people. Just pump excess money in a Vanguard targeted retirement fund (or something similar) and forget about it. Well, his specific suggestion was an equity index, not a fund of funds target retirement fund. So, I should qualify my original reaction. Using a target retirement fund wouldn't be a terrible choice, certainly better than a straight stock index. My biggest objection would be the "forget it" part. Just ignoring your savings/investments is how you wind up nearing retirement in 2008 with all your assets in stocks and wondering why half your money disappeared at such an inopportune time. Any advice that doesn't include suggesting someone be actively engaged in understanding what they're investing in and why is incomplete at best.

Stick it in one fund and ignore it is pretty terrible advice. If you don't want to advise her directly about what to do, but still want to give helpful and actionable advice, encourage her to . . . 1) start contributing now to take advantage of her age and her employer's matching (stash it in cash for the time being or some sort of balanced asset allocation fund) 2) talk with her employer's 401k advisor about her plan's options 3) read Bogle's little book on investing 4) read up on asset allocation (e.g., Ferri's All about Asset Allocation) 5) own her financial future by being proactively involved in understanding and choosing her own financial path

The boglehead forum can be a great resource; I've been a member there for a while. I'm ambivalent about it though. So many posters there are strictly dogmatic about EMH that they can't even conceive of someone using a value approach to investing and achieving market beating returns (it's cult-like). For example, the perspective on Buffett there is mostly that he's lucky, using inside information, and/or otherwise doing things that individual investors can't (buying whole companies and doing GS or BAC type deals). Anything other than pure efficient markets and indexing is pretty much non-existent, or drowned out by sheer volume. There is great information there, but the blinders most choose to wear make it somewhat inhospitable to open discussion of anything other than indexing. In a way it's interesting that there's even a forum since it all boils down to choosing your asset allocation and then using some mix of ETFs and/or index funds to execute it. What's to talk about? May as well take turns quoting from Bogle's Little Book of Indexing.

Daily tracking of prices and overall performance vs. benchmarks is in a google spreadsheet. I use Feedly as my RSS reader with feeds for all of my existing positions, general investing and industry feeds, and companies of interest.

Great read. Thanks for sharing.

Probably best to think about it as AUM rather than portfolio size. I have several personal accounts (retirement, education, personal brokerage) and a couple family retirement accounts. While they tend to have different constraints and purposes, I'm managing them all, even if they have different types of assets.

The unintended irony of this bit is outstanding. ;D