Money and Finance
- Even A Subpar Sage Is Pure Genius - By John Kay
Berkshire owns a number of insurance companies, which are strongly cash-generative, since the nature of insurance is that the payment of premiums precedes the payment of claims. These funds, and Berkshire’s retained earnings, are invested in a portfolio...
- Look To The East For Cheap Yield – By Merryn Somerset Webb
This brings me to one of my favourite long-term investments – what many readers insist is my “blind spot” and a market that no one has used the word “bubble” to describe for over two decades. I’m talking about Japan, of course (full disclosure:...
- Mohnish Pabrai On Position Sizing
In the UC Davis class discussion, Mohnish Pabrai mentioned how he switched from a 10x10 model of position sizing (10 positions of about 10% each) to a more diversified model after the 2008-2009 crisis. He then went on to discuss how he has switched back...
- Why This Value Investor Holds Cash In A Rising Market
Found via The Corner of Berkshire & Fairfax.The Canadian stock market is more vulnerable to a major pullback than its U.S. counterpart, warns one of Canada’s more successful money managers of the past decade.“We think that valuations in Canada,...
- Analysis Of Berkshire Hathaway
The paragraphs below are from an article by Whitney Tilson in November of last year when people were worried about Berkshire's index puts. T2's full analysis of Berkshire is available HERE. As Mr. Tilson pointed out, the worries were overblown...
Money and Finance
Whitney Tilson: Hot favourites won’t always turn out to be great winners
To this last point on buying and holding, the funds I co-manage have recently sold several long positions, driven by our belief that the odds of a significant market correction over the next year have increased substantially. We’re not predicting Armageddon, but we think the subprime train wreck is in its early stages and could have substantial effects on the world economy and credit markets.
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In light of this more cautious outlook we went through our portfolio, analysing each position and asking ourselves, “If our fund were 100 per cent cash today, would we buy this stock?” During times when our outlook is more sanguine, we sometimes hold 80-cent dollars – typically either in stocks that we purchased as 50-cent dollars and are waiting until they reach our estimate of intrinsic value, or in high-quality, growing businesses that are moderately undervalued, which we’re happy to own in lieu of cash at certain times. But in today’s environment, we prefer cash to anything but pound-the-table-with- conviction stocks.
In light of this more cautious outlook we went through our portfolio, analysing each position and asking ourselves, “If our fund were 100 per cent cash today, would we buy this stock?” During times when our outlook is more sanguine, we sometimes hold 80-cent dollars – typically either in stocks that we purchased as 50-cent dollars and are waiting until they reach our estimate of intrinsic value, or in high-quality, growing businesses that are moderately undervalued, which we’re happy to own in lieu of cash at certain times. But in today’s environment, we prefer cash to anything but pound-the-table-with- conviction stocks.
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As a result of this exercise, we’ve closed or reduced positions in great companies such as Microsoft, Costco, Wal-Mart and Anheuser-Busch.
As a result of this exercise, we’ve closed or reduced positions in great companies such as Microsoft, Costco, Wal-Mart and Anheuser-Busch.
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Among the highest-conviction stocks on which we’re now more concentrated are: Target, McDonald’s, Fairfax Financial and – my personal pick to “last the next decade” – Berkshire Hathaway.
Among the highest-conviction stocks on which we’re now more concentrated are: Target, McDonald’s, Fairfax Financial and – my personal pick to “last the next decade” – Berkshire Hathaway.
- Even A Subpar Sage Is Pure Genius - By John Kay
Berkshire owns a number of insurance companies, which are strongly cash-generative, since the nature of insurance is that the payment of premiums precedes the payment of claims. These funds, and Berkshire’s retained earnings, are invested in a portfolio...
- Look To The East For Cheap Yield – By Merryn Somerset Webb
This brings me to one of my favourite long-term investments – what many readers insist is my “blind spot” and a market that no one has used the word “bubble” to describe for over two decades. I’m talking about Japan, of course (full disclosure:...
- Mohnish Pabrai On Position Sizing
In the UC Davis class discussion, Mohnish Pabrai mentioned how he switched from a 10x10 model of position sizing (10 positions of about 10% each) to a more diversified model after the 2008-2009 crisis. He then went on to discuss how he has switched back...
- Why This Value Investor Holds Cash In A Rising Market
Found via The Corner of Berkshire & Fairfax.The Canadian stock market is more vulnerable to a major pullback than its U.S. counterpart, warns one of Canada’s more successful money managers of the past decade.“We think that valuations in Canada,...
- Analysis Of Berkshire Hathaway
The paragraphs below are from an article by Whitney Tilson in November of last year when people were worried about Berkshire's index puts. T2's full analysis of Berkshire is available HERE. As Mr. Tilson pointed out, the worries were overblown...