minireef05, thank you for the civil reply.
I have owned BRK multiple times since 1998 (currently out, with no intention of buying again at any price). My interest in BRK nowadays is strictly academic (WEB's principles vs my principal). In my opinion, WEB distorted the original definition of Intrinsic Value to suit his own purposes (to avoid paying a dividend) when he substituted the word cash flows for dividends.
By the way, I'm not the only person who believes that, search for the following March 12, 2007, article which references a much earlier, April 15, 2004, paper, "Bees for Their Honey", which is apparently no longer available online.
« Donaldson Capital Management John Burr Williams and the Theory of Investment Value, Part 2 »
Many, many years ago a reliable source who had attended one of the annual meetings reported back, that WEB had actually said that BRK would pay a dividend someday, and his dour sidekick had immediately seconded that, by saying, and it will be a big one.
I'm still waiting and watching.
A closed end fund, unlike a mutual fund, has TWO prices. The NAV per share is what the contents of the portfolio is actually worth. The Market Price per share is what retail is willing to pay for the portfolio. The difference is a measure of the market's current mind set. In my opinion, a high premium is indicative of irrational exuberance, that is, the willingness to stupidly pay too much for what something might actually be worth. So, have the folks who bought when the premium peaked made or lost money?
Chris, as long as WEB is alive AND BRK hasn't begun paying a regular cash dividend AND unscrupulous stock pumpers continue to attempt to con other folks out of their money (also known as"fleecing the sheep"), I will continue to post.
Happy Holidays to you too.
Just my opinion, but citing a Market Price per share without citing the corresponding NAV per share really is an exercise in pointlessness.
Yes, the highest price, YTD, occurred on 3Jul2014, and on that date the Price was $10.09 and the NAV was $8.57 which puts the premium at 17.76% (less than 20%).
The highest premium, YTD, occurred on 9May2014, 18.74% (less than 20%).
A market price of $9.50 per share would be a 26.5% premium over NAV ($7.51 per share as of 12/18/2014).
Take a look at the "Fund Premium/Discount to NAV" chart over on the AllianzGI website. NCZ has never even touched 20%, let alone exceeded it.
IMO, BRK-B "the stock", outperforms BRK-B "the business", for the simple reason that people get excited and bid the price up faster than the business actually grows. Just look at the vast majority of folks who post here. Judging them by their posts, they are unabashed stock pumpers. They buy at every increasing prices because the price has been rising, and, the price rises because they continuously buy at every increasing prices. BRK-B has become a momentum stock. Eventually the music will stop, the bubble will burst, and some poor sucker will get stuck holding this hot potato. Enjoy it while you can. JMO.
I was looking at this ETF as an alternative to holding T and VZ. But I'm just going to have to pass on it. I can tolerate the small, year-over-year, capital gain of 2.43% (as of 12/17/2014) but NOT the dramatic change in the annual distribution (a decrease of 30%). I'll stick with the individual stocks.
Amount payable on:
$2.251 ... 12/24/2014
$3.243 ... 12/27/2013
Check the NCZ page on the US AllianzGI website.
You should be able to locate it using a search engine and the text string (between the guillemets) below:
« AllianzGI Convertible & Income Fund II (NCZ) »
hc, thanks for thinking of me. The article was interesting.
For me, portfolio tweaking is pretty much over, so I spend less and less time here and at other financial web sites. I did take the time to look at a closed end fund and junk bonds in general, but I've never had much interest in either, so nothing came of that. I'm curious to see if GMO's hint that 2250 or greater (next year) for the S&P 500 might be the tipping point, but the current oil induced sell off complicates that bet. I like to think about what GMO's rational might be behind that call. The fact that WEB won't pay 120% of BV/s or more for BRK used to fascinate me, but I've solved that one, at least to my satisfaction, so I'm pretty much done with that too. Which is great! That leaves more time to pursue my other interests/hobbies.
I did get a chuckle out of your post, #214340, on the other board today.
So you now admit that you've been waiting six long years to finally sell your BRK-B. That goes a long ways towards explaining why you're so vile and hateful. By the way, my guess is your reference to hemorrhoids was no doubt subconsciously induced by your own condition. That's what sitting on a trade for that many years will do.
Just a bit of advice, don't take too long exiting this time, you may have effectively now "rung the bell" on BRK with your nonsense.
By the way, I see you've been badgering commoncents33 on the other board. I don't remember if it was him or someone else, but whoever labeled you an "Internet Bully", was spot on.
Hogs & quiches to you too, Sweetums.
« how does your annualized rate of return look ... »
I've wondered about that too.
Based on the historical data on the Allianz website, I've estimated that the annual total return since inception (a little more than 11 years), for someone who has NOT reinvested distributions, has been about 4.3%.
Date, NAV/s, Mkt P/s:
07/31/2003, $14.33, $15.00;
12/05/2014, $7.76, $8.75.
Total Distributions paid between dates : $15.40562
ATVPIC-1 = ( ( $15.40562 + $8.75 ) / $15.00 ) ^ ( 365.25 days per year / 4145 days ) - 1 = 4.29%
By the way, that's not a rigorous "Time Value of Money" calculation, but it is something most folks can relate to.
But that total return is pretty much in line with what I would expect from a high yield / junk fixed income fund. IMO, you get a high current income yield today in exchange for accepting a slow, gradual loss of capital over time.
The bottom line is spending 35 billion dollars to buy back shares at $115 per share (~119% of BV/s) would DECREASE book value per share by ~2.7%.
Before : 237.456 B$ / 2.464221 BSO = $96.36
After : ( 237.456 - 35 B$) / ( 2.464221 - 35 / 115 BSO ) = $93.74
It really is a shame that WEB and his devote muppetts focus on YOY changes in book value per share because FCFE/s, a crude guesstimate of what could be paid out as a regular dividend, would actually INCREASE by ~14% after that buyback.
Oh well, maybe you'll just have to wait for WEB's son, HGB, or his grandson, HWB, to make that shareholder friendly move.
Speaking of lucky grandchildren, if you bored and need a chuckle, check out Ettore's granddaughter, Caroline, driving grandpa's 14 M#$%$ car through the streets of Paris.
« Bugatti Royale aux grands concours d'élégance de St-Cloud »
yezzmann, your posts remind me of our 11-year old yellow Labrador retriever. She walks 10 feet and then squats to mark her territory, and then she walks another 10 feet and squats again, and then she walks another 10 feet and ..., I'm sure you get the idea.
Good morning hc. The good news is: at least one CEO is honest enought to say it.
« 2% to 3% growth feels perpetual: Wal-Mart CEO »
« Always the positive mind set. »
Tom, you and I are polar opposites.
I see myself as a defensive pessimist.
If you, or anyone else who might be reading this, cares enough to want to understand what that is, I can recommend the following article (it is online) from The Atlantic:
OLGA KHAZAN's "The Upside of Pessimism" - The theory of defensive pessimism suggests that imagining—and planning for—worst-case scenarios can be more effective than trying to think positively.
By the way, I am of the opinion that optimists were partially responsible for the deaths of the crew of the Challenger. If you care to read something in that direction, I can recommend the following (inexpensive paperback):
Edward R. Tufte's: "Visual and Statistical Thinking: Displays of Evidence for Making Decisions"
Beach understands the point I'm trying to make. If you get RID of the multiple of book value per share metric, and depending on what you decide to replace it with, then you just might be able to make the case that share repurchases increase the value.
IMO, WEB painted himself into a corner decades ago by over emphasizing book value per share and its year over year growth.
I really don't want to get into another BRK valuation discussion. I've done this numerous times over more than a decade and it has never, ever, lead to anything remotely useful. But you folks have fun with it. I'll watch from the sidelines.
hc, as long as folks continue to value BRK using some fixed multiple of book value per share, repurchasing shares at a price per share that is greater than book value per share does not make sense, arithmetically. Book value per share decreases after a buyback because the absolute book value (the numerator) falls faster than the number of shares outstanding (the denominator) does. Change the valuation model to something else, something that is NOT based on book value per share, and it can become a very different story. Besides, he has, theoretically speaking, already bought everything that is currently inside of BRK at 1X book value per share. Why would he want to buy it ("the same old same old") a second time at a higher multiple?
As usual, just my opinions.
Yes, hc, it is rare, but sometimes WEB gets the dirty end of the stick, Dexter shoes and GenRe come to mind.
My first BRK-B purchase was on 28Sep1998, around the time of the GenRe deal. The thinking in the press at the time was that it was a brilliant trade for WEB. He had successfully dumped some of BRK's grossly overvalued equity portfolio (remember KO traded at an average P/E of 51.3 that year) on the unsuspecting GenRe shareholders in exchange for their company and its fairly valued fixed income portfolio. But, IMO, they got the better of him on that deal, their portfolio also included a very wormy derivatives portfolio that took him years to work off.
Did you notice that the all of the railroad stocks (UNP, NSC, CSX and CNI) fell yesterday? I'm sure [sarcasm intended] that BRK's cheerleaders will insist that what was once BNI, was the lone exception.