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Berkshire Hathaway Inc. Message Board

  • Senator_Phil_E_Buster Senator_Phil_E_Buster Jun 5, 1999 2:52 PM Flag

    Greetings!

    From the great state of JAWGAH! Bastion of tha
    confederacy. May the flag forevah fly! Well now, the fust
    thang ole Warren really need to do is ditch tha ROC
    Cola and the Sandy Sundy and put sum good ole polk
    salat and kawnpone on the menu. The next thang he need
    to do is develup sum kinda no fawlt caw inshoance.
    These aw gonna be two of the maja planks in my platfawm
    when I run agin old Warren for the president of
    Buckshy Hathway! Can ah have ya vote, ladies and gents?
    Ah pledge to yall to get this compny back own tha
    right trak, to not make no foolish akazishuns, and to
    pay out one-tenth of ALL income in dividends! For
    whut mo could ya ast? Vote fa me. I ain't nevah lost
    no 'lecshun, and I don't plan to stawt now. The
    Senator

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    • You're hilarious!

    • I raised alot of issues relating to Gen Re being
      100% invested in equities. My main point was it would
      be bad and it will never happen. You are right about
      the combined ratio. I typed that message too fast. I
      didn't mean that. Read my post answering beserkshire.
      Anyone would have to admit nothing good could come from
      Gen Re being all in equities. It would destroy their
      operating results.

    • I'm not a proponent of any particular asset
      allocation. That wasn't the issue you raised -- you
      questioned whether BRK would be allowed to do this. I would
      rather leave the asset allocation decisions to WEB
      because he is better equipped to judge that matter than I
      am. To repeat, I don't believe the rating agencies
      would care if the total capital were large enough
      relative to the underwriting risk being taken.

      The
      asset allocation doesn't have anything to do with the
      combined ratio. The combined ratio is just the sum of the
      operating and marketing expenses and losses, divided by the
      premiums. How the premiums get invested once they are
      received never has any impact on the combined ratio.
      GenRe's combined ratio is not benefiting from being in
      bonds and would not be hurt by being in equities.

    • Because WEB often talks about options in the
      annual report and obviously considers it an important
      topic of discussion for value investors. I am assuming
      most BRKA shareholders are value oriented.

      Of
      course WEB can't take the time to explain the issue as
      well as it deserves. So I thought I might help BRK
      shareholders a bit.

      I own BRKS since 1988.

      WC

    • I meant to say net income including both
      investment income and the underwriting loss (or small gain)
      will tank because they will not have the $1 billion
      dollars or so in investment income currently coming from
      their large bond portfolio if they go all equities. The
      combined is based off premiums only. Sorry. I didn't proof
      read that message.

    • "How will they keep their combined ratio at the 100 level? If they off their bond portfolio their combined goes to 105 easily."I'm feeling a little dense today. Would you walk me through this?

    • WEB doesn't believe in stock options so why did you post that here?

    • The latest Market View for the Value Investor
      Workshop has been posted. This month I talk primarily
      about Stock Option Compensation. It�s a very important
      topic for all value investors.

      I hope you enjoy
      it.


      http://members.aol.com/WCrimi/general.html

    • I'm not talking about smooth results for Wall
      Street. I'm talking about operating results that are
      unique to a casualty writing reinsurance company. Don't
      think that because BRK is so overcapitalized that Gen
      Re can lose 70% on their equity holdings and nobody
      would care. Their competitors would have a field day
      with the bad press. Everybody here on this board
      thinks that Gen Re can do anything they want now that
      they are a Berkshire sub. It is true that Gen Re no
      longer answers to Wall Street and that is a good thing.
      There are many other positives for Gen Re that will
      come from them being a Berkshire sub. But one thing I
      can tell all of you for sure which was my original
      point - It would be a bad thing if Gen Re has all of
      its assets in equities and it will never happen.

    • "Where will they get their steady investment
      income that is crucial to the smooth operating results
      of a reinsurance company? "

      One of the major
      benefits of BRK acquiring GRN is that we don't care about
      "no stinking smooth ... results". This is a long-term
      investment vehicle which IS NOT subject to the silly
      quarterly Wall Street gyrations resulting from "smooth"
      results. None of the insurance regs give a flip either
      because BRK is SO OVERCAPITALIZED that its' equities
      could lose 70% of their value and we would still be
      well capitalized!

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