Liberty

1. I don't short. 2. I don't borrow. 3. There are very few eggs in my basket, so I can know them and watch them better than if I had many more. 4. Anything I buy, I have to be happy holding for 5-10 years even if the stock markets were closed. 5. I'm ready to pay up a bit for quality, which can avoid me bad surprises often found in lower-quality corps. 6. I have emergency funds that would last me a couple years, so if I lost my job I wouldn't be forced to sell stocks at what would potentially be a bad time. That's an extremely simple approach, which is why I think it has a better chance of working than complex methods.

IMO the important thing is that they don't change how their business is run based on their predictions, so that if they don't come true, there's no real negative impact, they just have to be more patient. I like corps with a good defense like that.

Q4 conference call is tonight at 5:30 pm ET: http://ir.wrberkley.com/events.cfm WRB calls are usually pretty instructive (at least, the couple that I've heard were).

There was an interview with Warren - I don't remember which - where he told the interviewer something like: "You want a stock tip? The day they announce my death, buy Berkshire."

My thought exactly! The more I learn about BRK, the less worried I am about succession. I'll be extremely sad about WEB being gone, but I'll also be buying the stock.

I feel like Warren jumps on whatever is the best opportunity in front of him at the time (if anything meets his criteria). That's why he does deals so fast; there's no detailed masterplan, just certain selection criteria that must be met. IMHO, If Munich Re is available at an attractive price and he can't find something else that has a higher expected return, he's not going to pass because it produces too much cash. He might pass for other reasons, but having too much cash that then must need to be redeployed is a high quality problem to have. Once that cash builds up again he can set his sights on a more capital-intensive elephant when the opportunity comes (big utility company? big manufacturer?). If he truly can't find anything after a while, he can always pay a dividend, but I'm sure that's not his preference -- he'll probably just wait for a big market correction/panic and get some stocks and/or businesses instead. He's patient and I bet his successors will be too. Maybe he'll have to look more and more outside the US to find stuff to buy, though...

Thanks. I'll try to answer your question as best as I can: The biggest reason why I concentrate in insurance is probably because it's where I feel like I know the most how to evaluate a business. I know it's dangerous because this industry is inherently more complex than, say, manufacturing or retail, but for some reason I feel more comfortable there. Berkshire is a significant part of my portfolio, so I feel like it provides me with some non-insurance diversification, and the insurance that they do have is extremely high-quality and backed up by a very solid balance sheet, so it makes me feel less nervous than if I had only insurance companies with less solid foundations. Another reason why I've been concentrating on insurance is that, because of float, it gives me some leverage (more than 1 dollar working for every dollar I put in) without me having to do it myself (I don't feel qualified to do so). I also like insurance right now because many excellent companies seem to be trading fairly cheaply historically. Not as cheaply as in 2008, but still pretty decent prices, good enough for me. I have a long time horizon, so I don't mind holding a bunch of insurance for a while even if it takes a few years for a hard market to come. I'd love to be well positioned when that happens, though. "Invert, always invert." So why shouldn't I concentrate on insurance? Hmm. Maybe all the non-insurance stocks that BRK, FFH and MKL have in their portfolios don't give me as much market diversification as I think somehow. I'm not seeing it, but maybe that's something I'm missing. It leaves me vulnerable to big cat events. But because of my long time horizon, if that happened it probably would just be a buying opportunity, as long as it doesn't cause so much damage that one of my firms goes bankrupt. Or am I too optimistic here? I know I have to question my choice of concentration, but I do still feel more comfortable with insurance even knowing all this. I figure if it's good enough for Buffett, it should do fine for me, as long as I stay with high-quality corps.

Hi everybody, This is my first post on this forum and I'd like to introduce myself. I've been a lurker for a few months and would estimate that I've read about 75% of the archives (a goldmine of insights! Thanks to all the posters who have contributed to making this forum so excellent). A little about myself: Small investor, not too much experience but trying to make up for it by learning from other people's mistakes and successes. I would say that I mostly align my investing philosophy with the usual suspects: Buffett, Munger, Graham, Fischer, Klarman, etc. I try to stay acutely aware of my limitations as an investors, so my current plan is mostly to find excellent businesses that can compound my money better than I could do it myself by just buying & holding them for many years (which is why I'm attracted to Berkshire and Fairfax). I also have a very concentrated portfolio (very few stocks), but some of those businesses have varied portfolios of stocks and bonds, so I feel like I get some exposure to a broad variety of businesses that way. I'd be quite happy with 10%/year average over the next decade or two, and I'd be ecstatic with 15%/year average, so I don't aim quite as high as the more aggressive investors on this forum. My criteria are pretty much: 1. Integrity of management 2. Good track record (not too short) 3. Good 'defense' (solid business that can withstand a lot and not lose capital) 4. Pro-shareholder policies (in compensation schemes, share buybacks at low prices, etc) 5. Quality at a fair price (I'm ready to pay up a bit for quality that I can hold forever. I'm not a deep value guy so far, I prefer buy & hold to trading Graham-style) I tend to prefer holding companies that allocate capital using Buffett-style methods, and my circle of competence is mostly in insurance (though I'm no expert), so I try to find holdings companies that allocate really well, as well as some specialty insurers that fit my criteria and that - while they might not invest as well as FFH - can generate good returns over the long-term because of superb underwriting. Some companies that I own that fit my criteria: BRK FFH RLI WRB MKL Others that I've been looking at but haven't yet bought (yet?) for a variety of reasons: HCC NATL AHL AWH ENH L Any feedback on any businesses mentioned here is welcome. I'm particularly curious to have more info about the HCC options scandal (?) from a few years ago. I have very little info about it (need to dig more), but ever since I saw it mentioned it has made me not trust them until I know more. Anyway, I think that's long enough for a first post ;D